The Gazprom Board of Directors addresses Eastern Gas Program execution

The Board of Directors entrusted the Gazprom Management Committee with the following tasks:
* continue efforts aimed at top-priority projects execution:
– construct the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS) and the facilities conveying natural gas from the Sakhalin I and Sakhalin II projects into the GTS;
– Gas Supply to the Kamchatka Oblast, Phase 1 – Gas Supply to Petropavlovsk-Kamchatsky project;
* proceed with acquisition of Kamchatgazprom;
* synchronize commissioning of the Kirinskoye field, the relevant onshore infrastructure creation inclusive, with the project for the Sakhalin – Khabarovsk – Vladivostok GTS construction;
* continue geological exploration at the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks offshore Sakhalin, the Zapadno-Kamchatsky prospect, as well as in the Krasnoyarsk Krai and Irkutsk Oblast;
* further develop Gazprom’s mineral resource base in the Republic of Sakha (Yakutia), taking into account acquisition of subsurface use licenses for new prospects and preparation of the Chayanda field for hydrocarbons development with due regard to bringing onstream the oil rim in 2014, the gas deposit in 2016 and launching the Yakutia – Khabarovsk – Vladivostok GTS construction in 2012;
* carry out the necessary preliminary and project work to establish the gas chemical and gas processing facilities in Eastern Siberia and the Far East with due consideration to possible cooperation with foreign partners;
* further development of the gas market in eastern Russia;
* continue the efforts aimed at developing the necessary support measures that will secure efficient field development and competitiveness of Eastern Siberian and Far Eastern natural gas and other locally produced goods.
When considering the issue, the Board of Directors underlined that the Sakhalin – Khabarovsk – Vladivostok GTS construction would meet the gas demand expected to increase due to the 2012 APEC summit.
The Board of Directors heard the information on the work being done to raise operating efficiency of Gazprom dobycha Yamburg and optimize (reduce) its costs.
The state-run Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program) was adopted in September 2007 pursuant to the Russian Industry and Energy Ministry Order. Gazprom was appointed by the Russian Federation Government as the Program execution coordinator.
At present, Gazprom Group holds licenses for the right to use the subsurface resources in the Krasnoyarsk Krai, Irkutsk Oblast, Republic of Sakha (Yakutia), Chukotka Autonomous Okrug, the Sea of Okhotsk and the Bering Sea offshore areas. Gazprom is performing geological exploration in Yakutia, the Krasnoyarsk and Kamchatka Krais, the Irkutsk Oblast and the Sakhalin Island offshore.
Among gas trunkline projects, the Sakhalin – Khabarovsk – Vladivostok GTS is a top priority of the Eastern Gas Program. In pursuance of the order by the Russian Government and the decision by the Gazprom Board of Directors adopted in September 2008, the work is currently underway to create this GTS for the purpose of developing gas supply to the Khabarovsk Krai and Sakhalin Oblast, and arranging gas supply to the Primorsky Krai starting from the third quarter of 2011.
In September 2007 the Russian Federation Government adopted the decision prescribing Gazprom to join the Gas Supply to the Kamchatka Oblast, Phase 1 – Gas Supply to Petropavlovsk-Kamchatsky project and gave specific instructions on the relevant issues within the project. As part of the project, Gazprom is pre-developing the Kshukskoye and Nizhne-Kvakchikskoye fields on the western coast of the Kamchatka Peninsula and is constructing the Sobolevo – Petropavlovsk-Kamchatsky gas trunkline projected for commissioning in 2010. The project also stipulates developing gas distribution networks in Petropavlovsk-Kamchatsky.
As part of the Eastern Gas Program execution, Gazprom is elaborating the concepts aimed at creating gas chemical capacities in Eastern Siberia and the Far East.
By now, Gazprom has inked Agreements of Cooperation with eleven Eastern Siberian and Far Eastern regions out of fifteen; and nine regions have inked Accords on Gasification with the Company.
In 2005 Gazprom developed the General Scheme for Gas Supply to and Gasification of the Irkutsk Oblast, which was fully updated in 2009. In 2007 the General Scheme for Gas Supply to and Gasification of the Far Eastern Federal Okrug was developed. In 2009 Gazprom finally developed the General Schemes for eleven Eastern Siberian and Far Eastern regions. The work is underway to prepare General Schemes for another two regions of eastern Russia.
The General Schemes stipulate a comprehensive approach to the gasification of the Eastern Siberian and Far Eastern regions. The Schemes also provide for a wide usage of liquefied hydrocarbon and natural gases in parallel with pipeline natural gas.
In May 2009 the Russian Government adopted the decision No.645-r, according to which regular royalty payments and profit production of the Russian Federation under the Sakhalin I and Sakhalin II Production Sharing Agreements would be taken in kind (natural gas) starting from 2011 for the purpose of arranging gas supplies to the Far Eastern Federal Okrug. Pursuant to the Russian Government Decision No. 2026-r dated December 22, 2009 Gazprom became responsible for these gas volumes marketing.