Gazprom and RusGazDobycha agree on terms regarding development of group of fields in Yamal-Nenets Autonomous Area

Alexey Miller, Chairman of the Gazprom Management Committee, and Artem Obolensky, Director General of RusGazDobycha, today signed at the Eastern Economic Forum 2016 in Vladivostok a Master Agreement regarding the joint project for the development of the Parusovoye, Severo-Parusovoye and Semakovskoye fields located in the Yamal-Nenets Autonomous Area.

The document is a follow-up to the agreements reached at the St. Petersburg International Economic Forum 2016. The Master Agreement defines in detail the conditions for project implementation.

The Agreement, inter alia, provides a framework for the establishment and operation of a project company. The parties set out the profitability targets of the future project and the marketing concept, including the principles of selling the produced natural gas, and drew up the list of activities to be carried out during the preparation phase prior to the final investment decision.

The parties agreed that Gazprom Dobycha Yamburg, as the field development license holder, and RusGazDobycha would establish the RusGazAlyans project company on equal terms. During the preparation phase, the project company will conduct an investment feasibility study, perform design and survey work, and compile the design documentation for the pre-development of the fields and the construction of the transportation infrastructure to connect the fields with Gazprom's gas transmission system. RusGazAlyans will also select potential contractors and fix the terms for the purchase of natural gas with future buyers.

As an outcome of the above, the parties will determine the project architecture, the scope of investments, and the financing structure. If the project conforms to the parameters outlined in the Master Agreement, the final investment decision will be made.