The Board of Directors’ meeting is underway at the Gazprom Headquarters.

The Board of Directors has agreed on Gazprom’s acquisition of 28.74 and 25.26 per cent of shares in Prospecting Company Kuznetsk owned by Methane Investors, LLC and Methane Exploration & Production Limited (Cyprus), respectively.

According to Dmitry Medvedev, Chairman of the Gazprom Board of Directors, “not only will coalbed methane extraction enable to expand Gazprom’s resource base, but it will also have a substantial socioeconomic effect. The successful implementation of this project will enhance the labor safety of Kuzbass miners, meet regional industrial and household gas requirements and create new jobs”.

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An expansion of the hydrocarbon resource base is a crucial aspect of Gazprom’s development strategy, with a considerable potential opened in this regard by the development of such prominent sources and occurrences of methane in the Earth’s crust as coal-bearing formations.

Russia’s potential coalbed methane resources are commensurate by volume with conventional natural gas fields and are estimated at 49 tcm, which is 15 per cent of the global total.

Characterized by the existence of a ramified infrastructure and favorable location of resources against large industrial centres in Kemerovo, Kuzbass is the most appropriate place to organize commercial coalbed methane production.

The coalbed methane exploration and extraction license for the South Kuzbass group of coal fields is held by Prospecting Company Kuznetsk.

At present the shareholders of Prospecting Company Kuznetsk are: Methane Investors, LLC (28.74 per cent), Methane Exploration & Production Limited (Cyprus) (57.47 per cent) and Kemerovo’s state owned company Kuzbass Financial Settlements Centre (13.79 per cent).

The acquisition of the stakes in Prospecting Company Kuznetsk will allow Gazprom to be involved in creating a new coalbed methane extraction industry within Russia’s fuel and energy sector, expand the Company’s hydrocarbon resource base and sales markets and, step up large-scale gasification in Kemerovo regions and southern Siberia.