From left to right: Valentina Matviyenko, Governor of St. Petersburg and Alexey Miller, Chairman of the Gazprom Management Committee

Today, at the Gazprom Headquarters, Alexey Miller, Chairman of the Gazprom Management Committee and Valentina Matviyenko, Governor of St. Petersburg have inked a Cooperation Accord for 2007 and a Gas Supply Program for St. Petersburg between 2007 and 2015 with an Outlook till 2025.

Under the Accord, St. Petersburg’s Government will arrange for timely and full cash payments for gas deliveries by budget-sponsored consumers.

The entities engaged in designing, constructing and operating thermal power, gasification and gas supply facilities in St. Petersburg and its suburbs will be assisted by the city’s Government in obtaining loan, tax and other allowances.

Gazprom and its subsidiaries will be also assisted in registering lease agreements for St. Petersburg’s land.

The Accord commits St. Petersburg’s Government to granting Peterburgteploenergo a long-term lease for new thermal power generation facilities.

The city’s Government will endorse a schedule of industrial consumer conversion to backup fuels and associated regulations as well as will take under control the accumulation and utilization of backup fuels by industrial consumers during sharp cold spells.

Gazprom, on its part, will provide reliable gas supply to St. Petersburg, study the possibility and forms of its participation in financing and implementing various investment projects and earmark investments to engineer and build a gas pipeline branch to the town of Kolpino including the Kolpino-2 and Lagolovo gas distribution stations, and a connection between the Belousovo-Leningrad and Kokhtla-Yarve-Leningrad gas mains.

In 2007 Gazprom will commit above RUR 803 mln to complete the construction of gasification facilities in the city, initiate the construction of new facilities and carry out design & survey work. Additionally, the Company will invest RUR 1.2 bln to build and upgrade thermal power generation facilities in St. Petersburg’s Petrogradsky district, with the identical amount to be committed for the same purposes in the Kurortny district. RUR 410 mln will be invested in the preparations for the construction and upgrading of thermal power generation facilities in the Petrodvortsovy district.

The Gas Supply Program for St. Petersburg between 2007 and 2015 with an Outlook till 2025 is targeted at consistently developing the gas supply system with the account of St. Petersburg’s energy infrastructure construction and upgrading.

The Program contemplates meeting the following major challenges:

• devising, agreeing on and ratifying a General Scheme of gas supply to St. Petersburg;
• raising the gasification rate of and reliability of gas deliveries to St. Petersburg’s household, power supply and industrial sectors;
• implementing investment strategies for the city’s energy and investment projects aimed at creating and upgrading engineering and energy infrastructure;
• securing the balance between natural gas deliveries to and consumption in St. Petersburg;
• optimizing the city’s primary energy mix
• boosting the reliability and throughput capacity of the gas supply system in the Northwestern Federal District of the Russian Federation.

Reference:

Gazprom and the Government of St. Petersburg entered into a five-year Cooperation Agreement on January 25, 2003.

In 2006 Gazprom supplied St. Petersburg with some 9.4 bcm of gas and over 10.8 bcm is slated for 2007.

Natural gas penetration in St. Petersburg’s residential sector is at 65 per cent as compared with the identical Russia-averaged figure of 53 per cent.

Between 2002 and 2005 Gazprom channeled RUR 806.9 mln to gasify St. Petersburg and its outskirts, with RUR 500 mln allocated in 2006 to construct 45.7 km of medium and low pressure gas pipelines.

Moreover, RUR 465 mln were earmarked in 2006 for building and upgrading St. Petersburg’s thermal power generation facilities.

Founded in April 2004 to upgrade and manage St. Petersburg’s heat supply network, Peterburgteploenergo is a 100 per cent subsidiary of Mezhregionteploenergo owned by Mezhregiongaz’s regional gas trading business units and Gazprombank (59 and 41 per cent of shares, respectively).