Board of Directors addresses strategy for underground gas storage sector

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

The Board of Directors heard a report on Gazprom’s strategy for the underground gas storage sector and identified the UGS sector development as an investment priority of the Company.

The Gazprom Management Committee was entrusted with continuing the work to further develop an underground gas storage system in Russia and abroad.


Russia has a ramified underground gas storage system that is an integral part of the Unified Gas Supply System of Russia (UGSS) and discharges the following functions:

  • covering seasonal swings and variations in gas demand throughout Russia;
  • storing gas reserves in the case of anomalously cold winters;
  • smoothing out fluctuations of gas exports
  • feeding gas in the case of contingency situations in UGSS;
  • storing long-term gas reserves in the case of force majeure in the gas production or export sector.

There are currently 25 underground gas storage facilities operational in the Russian Federation with 63 bcm of commercial gas and up to 600 mln cu m/d of the potential send-out capacity as of the start of a withdrawal period.

In addition, Gazprom stores gas in UGS facilities in Latvia, Germany, Austria and the Great Britain.

OAO Gazprom holds shares in companies owning and operating UGS facilities, namely ZAO ArmRosGazprom (Armenia), Latvijas Gaze (Latvia), WINGAS GmbH (Germany) and VNG AG (Germany).

Under its 2005–2010 Action Program for Underground Gas Storage in the Russian Federation, the Company sets out to boost the potential daily send-out of UGS facilities to 758 mln cu m by the withdrawal period 2010–2011.

The UGS Development Strategy up to 2030 hinges on the following basic principles:

  • maintaining the achieved level of Russian UGS capacities by upgrading and replacing aged and obsolete capacities;
  • promptly building up Russia’s UGS daily withdrawal capacity by expanding existing and building new UGS facilities;
  • providing UGS capacities for “deficit” regions of the Russian Federation;
  • developing at best the UGS system along with UGSS, synchronizing UGS facility and gas trunkline operation regimes
  • expanding the UGS network abroad to store Gazprom’s gas for higher reliability and flexibility of gas exports and bigger presence in the spot market

The above strategic tasks will be fulfilled on the platform of better intra-corporate UGS control structure via the foundation of Gazprom UGS, a specialized company that will consolidate underground gas storage assets on the territory of the Russian Federation.

Information Directorate, OAO Gazprom

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