Arkhangelsk hosted today a joint meeting dedicated to the completion of the gas pipeline branch construction to the cities of Arkhangelsk and Severodvinsk as well as prospects of the Arkhangelsk Oblast gasification. The meeting was co-chaired by Valery Golubev, Deputy Chairman of the Gazprom Management Committee and Ilya Mikhalchuk, Head of the Arkhangelsk Oblast Administration.

Taking part in the meeting were Viktor Ilyushin, Member of the Company’s Management Committee, Head of the Department of Relationships with Regional Authorities of the Russian Federation; heads and experts of the Gazprom Administration’s core business units and the following subsidiary companies: Gazprom transgaz Ukhta, Giprospetsgaz, Mezhregiongaz, Gazpromregiongaz, Gazkomplektimpex, Gazprom invest Zapad as well as Viktor Pavlenko, Mayor of Arkhangelsk; Alexander Belyayev, Mayor of Severodvinsk; Mikhail Yuryev, Mayor of Novodvinsk; the Arkhangelsk Oblast Administration’s representatives and top managers of largest companies.

In his opening speech Valery Golubev noted that the construction of the gas pipeline branch from the Ukhta-Torzhok trunkline system to Arkhangelsk and Severodvinsk is progressing according to the schedule.

The meeting discussed technical issues related to the completion of the gas pipeline branch construction to Arkhangelsk and Severodvinsk.

The meeting participants emphasized the requirement to timely execute activities aimed at preparing consumers for gas supply by the Arkhangelsk Oblast Administration.

Given the planned increase in the Arkhangelsk Oblast gasification, Gazprom and the regional administration will prepare and execute programs on energy saving and efficient utilization of natural gas.

Following the meeting results the Gazprom core business units and the Arkhangelsk Oblast Administration as well as Gazprom transgaz Ukhta, Giprospetsgaz, Gazkomplektimpex, Gazprom invest Zapad and Mezhregiongaz were engaged with tasks related to the completion of the gas pipeline branch construction and gas supply to consumers.

Background:

The gas pipeline branch from the Ukhta – Torzhok (Nyuksenitsa compressor station) gas trunkline system to Arkhangelsk and Severodvinsk has been constructed since 1988. The length of the gas pipeline branch will account for 642.7 km, projected throughput capacity by 2010 – over 2.5 bcm. Its full capacity – 3.3 bcmpa. At present, some 570 km of the gas pipeline has been constructed. Commissioning of the gas pipeline branch to Arkhangelsk and Severodvinsk in full capacity is projected for 2009.

The five-year Agreement of Cooperation between Gazprom and the Arkhangelsk Oblast Administration was signed in October 2004. The Accord on Gasification was signed as a supplement to the Agreement.

Natural gas penetration in the Arkhangelsk Oblast (exclusive of the Nenets Autonomous District) averages 7.1 per cent including 10.4 per cent in cities and towns, and 0.1 per cent in the rural area. The identical figures throughout Russia average 62, 67 and 44 per cent respectively.

Between 2006 and 2007 Gazprom committed RUB 1.177 bln to gasify the Arkhangelsk Oblast. These funds were used to construct six inter-settlement gas pipelines.

In 2008 the Company will invest a further RUB 504 mln for the same purposes. The funds will be allocated to the construction of eight inter-settlement gas pipelines.

In turn, the Oblast Administration is planning to switch some 9.5 thousand of apartments and households as well as seven boiler houses to natural gas between 2008 and 2009.