Within the scope of its activities Gazprom deals with development of gas supplies and gasification of the Russian Federation regions. Starting from 2001, Gazprom has been adopting regional gasification programs. Gasification of Russian regions is carried out jointly by Gazprom and federal constituents’ authorities. Thus, the Company finances construction of the inter-settlement gas pipelines delivering gas to population centers, while regional authorities take on street networks laying and preparation of consumers for gas supplies. In order to ensure efficient execution of the gasification program, Gazprom and federal constituents’ authorities enter into agreements of cooperation and accords on gasification. The Company and regional authorities annually approve the scope of work and the respective deadlines provided for in synchronization schedules for constructing the gasification facilities designated to connect consumers as soon as Gazprom completes the inter-settlement gas pipelines.
When selecting where to perform gasification activities, Gazprom takes the following factors into account:
- level of gas penetration in the region;
- region’s capability to share gasification costs;
- defaulted payments for current gas supplies;
- absence of unsanctioned gas consumption in excess of the preset limits.
The Company invested RUB 10 billion in regional gasification between 2001 and 2004.
In 2005 Gazprom considerably intensified the activities aimed at increasing the level of gas penetration in Russian regions. Between 2005 and 2010 the investments covered by Gazprom’s gasification programs for Russian regions totaled RUB 117.0 billion.
During the six years the Company constructed 1,048 gasification facilities with the total length exceeding 16 thousand kilometers providing for gas supplies to 2,134 population centers and 2,545 boiler houses.
As of December 31, 2010 the regional gasification level was raised by 7.3 per cent versus 2005 and averaged 63.1 per cent throughout Russia including 69.8 per cent in cities and towns and 46.7 per cent in the rural area.
In 2010 the gasification program covered 67 federal constituents, the total investments amounted to RUB 25.6 billion. The Company completed construction of 156 gasification facilities with the total length of 2.1 thousand kilometers.
For 2011 RUB 25 billion is scheduled for investment in gasification. As of December 31, 2010 gasification agreements were signed with 59 regions and general schemes for gas supply were designed for 74 regions.
Autonomous gasification
In December 2009 the updated Concept for Gazprom’s participation in the Russian Federation regions gasification was approved. The Concept stipulates a differentiated approach to the gasification process depending on the existence and the development level of natural gas reserves in the regions as well as the use of fuel alternatives including liquefied and compressed natural gases (LNG and CNG), and liquefied petroleum gas (LPG).
The Concept divides the regions into three groups based on the level of the natural gas infrastructure development, envisages triennial gasification planning for each region and introduces new safety standards. Special attention is paid to gasification of the sparsely populated centers detached from gas trunklines. This is of high importance for the rural area.
The program for gas supply to and gasification of the Republic of Buryatia was approved in 2010 and it is a pilot project for autonomous gasification of the entire federal constituent.
Gasifying eastern Russia
Further efforts by Gazprom will be aimed at achieving the maximum economically viable level of gasification in Russia. Gas supply to Eastern Siberia and the Far East is currently among the Company’s paramount objectives that will be met simultaneously with creating the production and transmission infrastructure in these regions.
As part of the Eastern Gas Program implementation, gas supply and gasification measures have been elaborated for seven Eastern Siberian and Far Eastern regions: the Transbaikal, Kamchatka, Primorsky and Khabarovsk Krais, the Sakhalin Oblast, the Republics of Buryatia and Sakha (Yakutia).