A working meeting between Alexey Miller, Gazprom’s Management Committee Chairman and Bolot Abildaev, Finance Minister of the Kyrgyz Republic, was held today at Gazprom’s Headquarters.

The parties examined the progress in implementing the Plan of Paramount Joint Activities within the long-term Agreement on Cooperation in the Gas Industry concluded between Gazprom and the Kyrgyz Republic.

In particular, the parties touched upon natural gas exploration and production as well as upgrading and modernizing the existing and developing new gas transportation capacities in the Kyrgyz Republic.

A. Miller and B. Abildaev addressed issues related to transferring a 85.16% stake of the Kyrgyzneftegaz company under Gazprom’s trust management.

Reference:

Gazprom and the Government of the Kyrgyz Republic signed the 25-year Agreement on Cooperation in the Gas Industry on 16 May 2003.

In particular, the Agreement envisages:

• exploration, development of hydrocarbon fields in the Kyrgyz republic
• upgrading, constructing and operating gas mains and other Kyrgyz gas infrastructure facilities
• gas transmission and deliveries while implementing joint projects

The Paper also envisages for joint upgrading the Mailu-Suu UGS facility-based compressor stations and equipment deliveries to meet the Kyrgyz gas infrastructure needs.

In January 2004, Gazprom and the Government of the Kyrgyz Republic approved the Plan of Paramount Joint Activities, to be fulfilled within the aforementioned Agreement. The Plan determines the scope and timing of works to be executed as well as types of interaction while upgrading, constructing and operating the gas transmission system facilities, jointly exploring and developing fields and rendering services to the Kyrgyz side.

Pursuing the objectives fixed in the Agreement, Zarubezhneftegaz, a Gazprom subsidiary, completed preliminary preparations and started registering its affiliate in the city of Bishkek.

Kyrgyzia’ proved natural gas reserves are estimated at 6 bcm. The Republic faces certain difficulties in developing its gas fields due to geological complexity of the fields and the undeveloped gas infrastructure. Kyrgyzia annually produces some 30 million cubic meters of natural gas and plans to build up its annual gas production up to 40 million cubic meters in 2010.

Natural gas ratio in the Kyrgyz fuel and energy balance exceeds 30%. Natural gas is used in the residential sector (42%) and the industrial and power generation sectors (58%). Kyrgyzia annually consumes some 700 million cubic meters of natural gas imported, to a large extent, from Uzbekistan.

Total length of the Kyrgyz gas pipelines (gas distribution networks, inclusive) accounts for some 600 km.

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