Led by Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee, the Company’s delegation has made a business trip to the Khabarovsk Krai and Sakhalin and visited the construction facilities of the first start-up complex of the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS).

Alexander Ananenkov visited the construction facilities of the gas trunkline and held an operational meeting involving heads and experts from Gazprom’s specialized subdivisions, subsidiaries and contractors.

It was noted that procurement operations, bases installation and construction of the Sakhalin – Khabarovsk – Vladivostok gas pipeline progressed in full compliance with the approved schedules. It is projected to accomplish construction of some 300-kilometer-long linear section of the pipeline by the end of 2009.

Background:

The September 2007 Order by the Russian Federation Industry and Energy Ministry approved the 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). Gazprom was appointed by the Russian Government as the Program execution coordinator. Pursuant to the Program it is projected to construct new gas production centers in Eastern Russia: Krasnoyarsk, Irkutsk, Yakutia, Kamchatka and Sakhalin.

The Program stipulates the prioritized construction and development of the Sakhalin – Khabarovsk – Vladivostok GTS to be connected in future with the gas pipeline from the Republic of Sakha (Yakutia). The Sakhalin – Khabarovsk – Vladivostok GTS is being constructed according to the assignment by the Russian Federation Government and the decision of the Gazprom Board of Directors.

The first start-up complex of the Sakhalin – Khabarovsk – Vladivostok GTS will be brought onstream in the third quarter of 2011. It shall ensure gas supply to Vladivostok and generation capacities commissioning in the Primorsky Krai by the 2012 APEC Summit.

The first GTS start-up complex will have the length of 1,350 kilometers and the capacity of 6 billion cubic meters per annum. When brought to full capacity, the system will deliver circa 47.2 billion cubic meters of natural gas including around 30 billion cubic meters of Sakhalin gas. This will make it possible to meet the prioritized gas demand of Russia’s Far Eastern regions (Khabarovsk and Primorsky Krais, Jewish Autonomous District and Sakhalin Oblast), as well as to create additional potential for gas exports to Asia-Pacific countries.

Natural gas from the Sakhalin offshore area and Yakutia’s fields will serve as the primary resource base for the Sakhalin – Khabarovsk – Vladivostok GTS development. In July 2009 Gazprom obtained the subsurface licenses for the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks of the Sakhalin III project. Geological exploration activities are already in progress at the Kirinskoye field (license obtained in 2008). The field is to be brought onstream in 2014.