Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee held a meeting at the Gazprom Headquarters today on issues related to the development of long-term gas balance parameters before 2020.

Taking part in the meeting were Vasily Podyuk, Member of the Company’s Management Committee, Head of the Gas, Gas Condensate and Oil Production Department as well as heads and experts of the Gazprom Administration’s core business units.

Meeting participants discussed the progress with the adjustment of long-term gas balance parameters.

It was emphasized that among the key factors influencing the amendment of the long-term gas balance are the evaluation of gas sales potential in the domestic and foreign markets including Eastern Siberia and the Far East as well as prospects for integrated and synchronized development of gas production, transmission and storage capacities.

The adjustment of gas balance parameters before 2020 largely depends on the development of updated fuel and energy balances of the Russian Federation regions in terms of time and quality.

The meeting participants gave consideration to a projected increase in gas volumes from independent producers and associated oil gas to be fed into the gas transmission system. There was pointed out a necessity to receive duly and accurate relevant information from oil and gas companies.

The meeting noted that when developing long-term gas balance it was necessary to provide for all possible measures and mechanisms intended for efficient utilization of the “blue fuel”, energy saving as well as enhancing gas competitiveness compared to other fuel resources.

Following the meeting results the Company’s core business divisions were engaged with further developing long-term gas balance parameters.

Background:

Fuel and energy balance (FEB) is a system of indicators showing the availability and utilization of all kinds of energy resources in the national economy. The economy demand for fuel and energy resources is determined by the following key criteria: generation of other kinds of energy, production and technological needs, other needs, export, as well as storage and transportation losses. Fuel and energy resources include the produced fuel, power energy generated at hydro- and nuclear power plants, import, etc. FEB indicators are calculated in tons of fuel equivalent.

Gas balance is a system of indicators defining natural gas resources, their distribution and utilization. Overall gas demand embraces production & operational, and technological needs as well as export, gas injection into UGS facilities and other expenses. The resource part of the gas balance includes gas production, import, withdrawal from UGS facilities and other incomings. Gas balance is calculated in terms of physical volume (cu m).

FEB is a major tool used for the long-term planning of the development parameters attributed not only to the fuel and energy sector, but the country’s economy in general. In accordance with the Parliament Proceedings Guidelines of March 20, 2007 themed “On the Legislative Support for the Russian Federation Fuel and Energy Balance Streamlining”, FEB is the second most important document after the socioeconomic development forecast and a cornerstone within the Federal Budget development process.

Gas balance is an integral part of FEB along with the production and consumption balances for other fuel and energy types. The share of gas in the Russian fuel and energy resources consumption pattern accounted for 42 per cent in 1991 and exceeded 51 per cent in 2006. Russia’s Energy Strategy up to 2020 approved by the Government of the Russian Federation in 2003, sets the task to substantially reduce this share in order to enhance the national energy security.