Alexey Miller briefs Dmitry Medvedev on Gazprom’s readiness for winter and progress of Russian Regions Gasification Program

A working meeting took place between Dmitry Medvedev, Prime Minister of the Russian Federation, and Alexey Miller, Chairman of the Gazprom Management Committee.

Alexey Miller briefed Dmitry Medvedev on the Company’s readiness to operate during peak loads in the 2017–2018 autumn/winter season.

Attention was also paid to the implementation of the Russian Regions Gasification Program by Gazprom.

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Dmitry Medvedev: Mr. Miller, winter has set in across most of Russia. How are Gazprom’s preparations going at what is essentially the start of the winter season?

Alexey Miller: Esteemed Mr. Medvedev, by now Gazprom has completed 12 sets of preventive maintenance and repair operations and performed in-line inspections for 17,400 kilometers of gas trunklines, of which 630 kilometers have been overhauled. A total of 72.184 billion cubic meters of gas has been injected into Russian UGS facilities. Our potential maximum daily deliverability is now at 805.3 million cubic meters of gas. It is an all-time high.

Traditionally, Gazprom has a significant production potential that amounts to over 100 billion cubic meters of gas per year.

All things considered, we can safely say that Gazprom will provide reliable gas supplies to consumers in Russia and abroad in the upcoming autumn/winter period.

Dmitry Medvedev: That is good to hear, as the overall readiness of Gazprom defines to a large extent if our country is ready for winter and what the industry calls the autumn-winter maximum. Our country is indeed challenging in that regard.

There is another major program Gazprom has worked on for the last 12 years since 2005 (I still remember it from my tenure on the Company’s Board of Directors). How is the Gasification Program going? It is one of the most discussed and well-known social and industrial endeavors undertaken by Gazprom.

Alexey Miller: In 2017, the Gasification Program covers 68 regions. It is planned to build 1,700 kilometers of gas pipelines this year. The amount of investments earmarked for 2017 is RUB 29.5 billion. We intend to connect to gas 160 boiler houses and almost 76,000 households in more than 200 population centers. It will help us raise the average gas penetration level in the country to 68.1 per cent by January 1, 2018.

Dmitry Medvedev: What is the baseline here?

Alexey Miller: In 2005, it was 54 per cent countrywide, with 60 and 34 per cent for urban and rural areas, respectively. By January 1, we will reach 58.3 per cent in rural areas and 71.1 per cent in cities and towns.

In outlining the Gasification Program, the Government had set out to speed up the gasification processes in rural areas. Over those years, the growth in gasification in rural areas has been almost double that of cities and towns.

As for 2018, we plan to boost our investments compared to 2017, although we know very well that the pace of the program very much depends on regional authorities and their ability to provide for connections and construct inter-settlement networks. In any case, we can see that gasification is going at a steady pace across the country. And considering the year-to-year improvements in the fulfillment of obligations by the regions under the Gasification Program, I think our performance in 2018 will be even better than in 2017.

Dmitry Medvedev: This is very important, especially for rural areas (we have discussed it on multiple occasions) because the living standards are so different there. There are more opportunities in the cities. Of course, urban areas matter greatly for the Gasification Program, but the situation was somewhat better there initially.

You have mentioned regions. Together, we have had several meetings with regional authorities – learning lessons, as it were – because initially the responsibility was supposed to be shared by Gazprom as a gas major on the one hand and by regional authorities on the other hand (I am speaking about low-pressure networks and intra-settlement, intra-city routing). I think that, in a little while, we will once again call a meeting with heads of regions to spur the implementation of this program that our citizens are looking forward to so eagerly.

Alexey Miller: That would be very timely, Mr. Medvedev, in view of the growth in private consumption. Over the first ten months of this year, domestic consumption via Gazprom’s gas transmission system has grown by 6.7 per cent against the same period of 2016. It can be attributed primarily to private consumers and basic industries: power generation, agricultural chemistry, metallurgy. Still, I would like to mention private consumers specifically. Of course, discussing it with regional heads would be very useful.

Taking into account the increasing gas consumption in Russia and abroad, we have ramped up our gas production by 56.4 billion cubic meters versus the same period of 2016. It is a 17.2 per cent increase from the first ten months of 2016. It is undeniably impressive.

This is why a meeting with heads of regions would be very timely in view of the growing private consumption.

Dmitry Medvedev: Very good. Let us do that.