Alexey Miller, Chairman of the Gazprom Management Committee adopted the Russian Regions Gasification Program for 2011.

In compliance with the signed document Gazprom will allocate RUB 25 billion for gasification of 65 Russian regions next year.

As in the previous years, when determining the investment amount for each specific Russian constituent the Company will consider not only its gasification level, but also the arrears for delivered gas and the fulfillment of schedule by regional authorities regarding consumers preparation for gas supply.

Background:

Gazprom has been adopting Russian regions gasification programs since 2001. Regional gasification is carried out jointly by Gazprom and federal constituents' authorities. At the same time, the Company finances construction of inter-settlement gas pipelines, that is gas delivery to population centers, while regional authorities take on street-level networks laying and consumers preparation for gas supply. In order to coordinate the activities, Gazprom and administrative authorities of the Russian constituents listed in the Program, annually sign synchronization schedules for gasification facilities commissioning.

Since 2005 Gazprom considerably intensified the activities aimed at increasing the regional gasification level in Russia. Between 2005 and 2009 the Company allocated over RUB 90 billion for these purposes. This increased the average gasification level in Russia by 9 per cent – from 54.2 to 63.2 per cent.

In 2010 Gazprom invested over RUB 25 billion in the gasification of Russia.

In December 2009 the Gazprom Management Committee approved the updated Concept for Russian Regions Gasification. Under the document, the scope of Gazprom's participation in the gasification process depends on the availability and the development level of natural gas reserves.

The document prescribes a gasification mechanism for population centers that are sparsely inhabited and located far from gas trunklines, including with the use of liquefied and compressed natural gases as well as liquefied petroleum gas. This is especially important for rural areas, particularly in Eastern Siberia and the Far East.

Gazprom's further activities on Russian regions gasification will be oriented at achieving the maximum possible and economically viable gasification level in the Russian Federation.