Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee chaired a meeting in the city of Ufa today dedicated to the underground gas storage (UGS) system development.

Taking part in the meeting were heads and experts of Gazprom Administration’s core business units and the following subsidiary companies: Gazprom UGS, Gazprom transgaz Moscow, Gazprom transgaz Saratov, Gazprom transgaz Ufa, Gazprom transgaz Volgograd, Gazprom transgaz Kuban, Gazprom transgaz Yugorsk, Gazprom export, Gazprom invest Zapad, Gazpromstroyengineering, Giprospetsgaz, Gazproektengineering, VNIIGAZ, Podzemgazprom, VNIPIgazdobycha, and NIIgazeconomica.

The meeting participants discussed current issues and prospects for the development of the UGS system in Russia and abroad.

It was noted that UGS facilities are among crucial elements in reliable functioning of the Unified Gas Supply System of Russia providing up to 30 per cent of gas supplies during winter periods.

The meeting emphasized that the gas transmission system goes through the active development now, which is directly linked to gas production growth both by Gazprom and by independent producers as well as higher gas demand in Russia and abroad. In this context, the contribution of UGS facilities to the optimal performance of the gas transmission system increases considerably.

In this respect, Alexander Ananenkov underscored that securing reliability and enhancing flexibility of gas supplies to consumers in Russia and abroad as well as the potential increment in the peak daily send-out of UGS facilities to 1 bcm by the start of the withdrawal season are the main tasks in the UGS System development being currently implemented by Gazprom.

The participants addressed the progress in engineering and development of new UGS facilities, reconstruction and technical re-equipment of existing UGS facilities within the execution of 2005-2010 Program for underground gas storage activities in the Russian Federation. In particular, the Company is now constructing  three and designing seven new UGS facilities within Russia.

A special attention was paid to the issues of UGS facilities creation and synchronized development including heliostorages in Eastern Siberia and the Far East as an integral part of the Unified Gas Production, Transmission and Supply System currently developed in the region.

The meeting participants discussed issues regarding UGS facilities development and utilization abroad with the view to provide reliability and flexibility of export deliveries and to facilitate a burden on the gas transmission system.

Following the meeting results the Gazprom Administration’s core business units were engaged with ensuring the accelerated development of the UGS System in Russia as well as implementing a number of activities to optimize functioning of the Gas Transmission System and UGS facilities.

Background:

There are currently 25 Underground Gas Storage (UGS) facilities operational in the Russian Federation with the commercial gas volume of 64 bcm. The potential peak daily send-out of UGS facilities by the withdrawal season start-up accounts for 620 mcm, the daily average send-out of UGS capacities between December and February - 500 mcm.

Moreover, Gazprom stores gas in UGS facilities in Latvia, Germany, Austria and the UK.

Gazprom holds shares in companies owning and operating UGS facilities, namely ArmRosGazprom (Armenia), Latvijas Gaze (Latvia), WINGAS GmbH (Germany), and VNG AG (Germany).

The Gazprom UGS Development Strategy up to 2030 hinges on the following basic principles:

• maintaining the achieved level of Russian UGS capacities by upgrading and replacing off-market and depreciated capacities;
• accelerated building up Russia’s UGS daily send-out capacity by expanding existing and building new UGS facilities;
• providing UGS capacities for “deficit” regions of the Russian Federation;
• developing at best the UGS System along with UGSS, synchronizing UGS facility and gas trunkline operation regimes;
• expanding the UGS network abroad to store Gazprom’s gas for higher reliability and flexibility of gas exports.