The Gazprom Management Committee has considered the readiness of the Unified Gas Supply System (UGSS) facilities for the period of peak loads during the autumn/winter period of 2010–2011, as well as the measures required to ensure uninterrupted gas supplies to Russian consumers over winter periods in the long run.

The meeting noted that the UGSS was generally ready for the forthcoming autumn/winter period.

Heads of Gazprom’s subsidiary and affiliated companies were tasked to timely complete the major activities aimed at preparing facilities for the 2010–2011 autumn/winter operation.

The Company’s specialized subdivisions were tasked to compile the materials required to tackle this issue at the Board of Directors meeting.

It was emphasized at the meeting of the Gazprom Management Committee that in addition to the UGSS readiness, successful operation in the autumn/winter period, especially during low temperature spells and peak gas consumption, would largely depend on the availability of backup fuel reserves (fuel oil, coal, etc.) at power generation facilities and large industrial enterprises, as well as on the regional gas consumption discipline and compliance with Schedule 1.

Background:

During preparation for the 2010–2011 winter period underground gas storage (UGS) facilities have been replenished with roughly the same gas volume as was withdrawn during the last autumn/winter period, marketable gas reserves in UGS will make up 64  billion cubic meters, identical to the amount of the same period in 2009. The UGS facilities throughput capacity is at a required level: the maximum daily gas sendout in the beginning of the withdrawal season will make up 620 million cubic meters, while the average daily gas sendout from December through to February will make up 500 million cubic meters.

As of October 1, 2010 all the selected gas treatment units at the gas production facilities undergone preventive maintenance and booster compressor shops were fully repaired. 404 wells were overhauled and 87 wells were commissioned including in the Zapolyarnoye field, the Zapadno-Pestsovaya area of the Urengoyskoye field and the Yareyskaya area of the Yamsoveyskoye field.

16 sets of scheduled maintenance and repair operations were implemented at UGSS facilities in 2010.

The distribution networks of regional gas distribution companies were prepared for the winter period in accordance with the schedule. At present, the subsidiary and affiliated gas distribution companies of Gazprom Group maintain 611.7 thousand kilometers of gas pipelines, 39 thousand boiler houses, over 17.6 thousand industrial consumers and 198 thousand household consumers.

To secure uninterrupted gas supply to the residential and utility sectors, a schedule of converting Russian industrial consumers to backup fuels (Schedule 1) is endorsed annually by regional authorities.

Schedule 1 is applied under Article 19 of the Regulations on Gas Supply in the Russian Federation approved by the Russian Federation Government Directive No.162 dated February 5, 1998. Schedule 1 stipulates partial conversion of industrial consumers to backup fuels (fuel oil, peat, coal, etc.) under abnormally low temperatures in order to save a certain amount of  gas and to use it for meeting increased demand of the residential and utility sectors.

Conversion to backup fuels and their timely procurement are provided for in the gas supply contracts made with all industrial consumers.