Board of Directors approves results of gasification program for Russian regions in 2007

The Board of Directors Meeting is in progress at the Gazprom Headquarters.

The Board has approved Gazprom operating results in 2007 on the Gasification Program execution of the Russian Federation regions. The meeting particularly noted that the Gazprom obligations for the gasification facilities construction would be totally fulfilled this year.

The Board tasked the Company’s Management Committee to continue work on gasification of the Russian Federation regions in 2008.


The Areas of responsibility within the execution of the Gasification Program of the Russian Federations regions are outlined as follows. Gazprom constructs local gas pipelines. Construction of the gas distribution networks, both street and domestic, as well as acquisition and installation of the gas equipment is provided using budgets of all levels, money inputs of the population and other financial resources. To exercise coordination for these activities, Gazprom and the Administrations of the Russian Federation constituents (included in the Program) signed respective synchronization schedules for commissioning of the gasification facilities.

By early 2005 the gasification level of the whole Russia was 54 per cent, including 61 per cent in towns, cities and urban settlements as well as 36 per cent in rural area.

Gazprom investments in the gasification of the Russian regions in the amount of RUR 22.8 bln during 2005–2006 (RUR 5.2 bln in 2005 and RUR 17.6 bln in 2006) increased the average level of gasification in the Russian Federation to 58 per cent as of January 1, 2007, including 64 per cent in the cities and 40 per cent in rural area.

Currently, within the schedule plans 42 regions have completely fulfilled or are fulfilling the obligations on preparing consumers for gas intake by the Administrations of the Russian Federation constituents. In nine Russian constituents preparation of consumers for gas intake occurs with significant delays against the schedule including the Astrakhan, Ivanovo, Kostroma, Kurgan, Novosibirsk, Tver, Tula, Chelyabinsk Oblasts and the Krasnodar Krai.

In 2007, Gazprom allocated RUR 20.2 bln for the Gasification Program implementation; the Company constructed 421 gas mains with the total length of 7,100 km in 53 constituents of Russia. Thus
545 settlements have been provided with gas, along with 1.9 mln apartments and homes, 1.3 mln of which are located in the cities and towns, and 0.6 mln – in the countryside. 10,500 municipal enterprises were switched to natural gas, along with 2,000 rural and village heating plants as well as 240 agricultural enterprises.

This allowed to retain the amount of investments to the regions where the synchronization schedules were successfully implemented, and to additionally include five Russian constituents in the Program such as the Irkutsk Oblast, Republic of Kareliya, Republic of Altai, Yamal-Nenets Autonomous Okrug and Republic of Dagestan.

Additionally, RUR 1.5 bln were allocated in 2007 to reconstruct and technically upgrade the existing gas networks.

Thus, during the 2005–2007 period Gazprom constructed
543 gasification installations with the total length of 8,400 km, provided gas to some 1,200 settlements, 4.4 mln apartments and homes including 1.4 mln in rural area. The Gasification Program will encompass 13 mln Russian citizens in 58 regions of the Russian Federation.

In 2008, Gazprom plans to commit RUR 23.05 bln for gasification of the Russian regions.

Like in the previous years, the most significant factor for allocation of investments within the Gasification Program will be the fulfillment of obligations by the administrative authorities regarding preparation of consumers for gas intake. The regions where the preparation of consumers for the gas intake is carried out successfully, investments of Gazprom for the next year will be stipulated in the amount not less than in 2007. As to the regions, where the administrative authorities failed to fulfill their obligations on preparation of consumers for gas intake in 2007, the investments for 2008 will be allocated only to complete the construction of gasification facilities.

In order to decrease the financial burden of the population while gasifying the private housing, the synchronized schedules for 2008 will stipulate obligations of the administrative authorities of the constituents on construction of the street distribution networks without attraction of investments from the population as well as exception of the fee for the right of commissioning to gas networks.

Information Directorate, OAO Gazprom

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