Today the Gazprom headquarters hosted a working meeting between Alexey Miller, Chairman of the Company's Management Committee and Valery Shantsev, Governor of the Nizhny Novgorod Oblast.

The parties discussed the progress in implementing the Agreement of Cooperation placing an emphasis on further gas supply development in the Gorky industrial hub including the cities of Nizhny Novgorod, Dzerzhinsk, Balakhna, Zavolzhye and Bor. To achieve this task Gazprom has began constructing an interconnector between the Pochinki – Gryazovets gas trunkline and the operational gas lateral to the Gorky industrial hub. The Company is also constructing another gas lateral and a gas distribution station.

The meeting participants discussed the regional gasification issues as well. For instance, they discussed a possible increase in Gazprom's allocations for the construction of the Oblast's gasification facilities in 2012 as compared to the 2011 figures. It was stressed that this issue could be considered if the Oblast fully met its obligations on consumers preparation for gas deliveries and cleared its arrears for supplied gas.

Background

The Agreement of Cooperation between Gazprom and the Nizhny Novgorod Oblast Government was signed in January 2002 and extended in August 2007 for an indefinite period. The Accord on Gasification was inked in October 2006.

Natural gas penetration in the Nizhny Novgorod Oblast makes up 78.6 per cent. The identical figure throughout Russia is 63.1 per cent.

Gazprom's investments in the Oblast gasification totaled RUB 2.3 billion between 2005 and 2010. These funds were used to construct 27 inter-settlement gas pipelines with the total length of 280 kilometers and one more inter-settlement gas pipeline is close to completion now. In 2011 the Company invested RUB 38 million in the regional gasification.

As of September 01, 2011 the arrears of the Nizhny Novgorod Oblast consumers for supplied gas accounted for RUB 576.8 million.