Today, at the Gazprom Headquarters, Alexander Medvedev, Deputy Chairman of the Management Committee of Gazprom and Klaus-Ewald Holst, Chairman of the Executive Board of Verbundnetz Gas signed in the presence of Reiner Haseloff, Economy and Labor Minister of Saxony-Anhalt an Agreement of Cooperation in the underground gas storage sector.

Pursuant to the Agreement, the parties will construct a new UGS facility near Bernburg (Saxonia-Anhalt, Germany). The first gas storage cavern is planned to begin operation in 2009 and the last one – in 2022. By the construction end the active capacity of the UGS facility will account for 510 mln cu m of gas.

“The Gazprom Group’s participation in underground gas storage projects in Germany represents a concrete example of the execution by the Company of its strategy aimed at providing European energy security,” stated Alexander Medvedev.

“Within the next 14 years Gazprom and VNG are determined to jointly invest circa EUR 350 mln in the construction of UGS facilities and to create a total of ten additional caverns in Saxonia-Anhalt. In this way, our companies will make a substantial contribution to higher reliability of supply to European consumers,” said Klaus-Ewald Holst.

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Established in 1969, Verbundnetz Gas AG (VNG AG) (Leipzig) is a supplier of gas to Germany’s eastern federal lands and Berlin. VNG core business activities involve natural gas import, supply to consumers as well as underground storage.

At present, the company’s shareholders are as follows: EWE –47.9 per cent, Wintershall Holding AG –15.79 per cent plus one share, VNG Verwaltungs und Beteiligungsgesellschaft mbH –25.79 per cent minus one share, EEG –5.26 per cent, Gazprom –5.26 per cent.

As part of its strategy targeted at expanding underground storage capacities, Gazprom operates at Rehden (Germany) one of the largest UGS facilities with a total capacity exceeding 4 bcm.

In addition, Gazprom together with RAG and Wingas are engaged in the construction and operation of Austria’s Haidach UGS facility.

Upon completion of stage two by 2011, Haidach with a working gas volume of 2.4 bcm will become the second-largest UGS facility in Central Europe.