Today, at Gazprom’s Headquarters, Aleksey Miller, Chairman of Gazprom’s Management Committee and Valery Serdukov, Governor of the Leningrad Region, have signed the network schedule for the construction of gasification facilities in the Leningrad Region as well as the Treaty on cooperation between Gazprom and the Government of Leningrad Region for 2006.

The Leningrad Region’s network schedule is expected to provide preparation of pipelines between settlements & gas networks within settlements after Gazprom’s large-scale pipeline construction, respectively, as stipulated by the gasification program for RF regions over 2005 to 2007.

“The success of gas supply program depends directly upon how quickly gas will be provided to the ultimate consumers especially in rural areas. This, in its turn, is influenced not only by Gazprom’s pipelines timely construction but the ability of RF regional authorities to prepare consumers in time for gas delivery. The schedule signed today concretizes this task”, noted Aleksey Miller

“Both Gazprom and the Government of Leningrad Region are interested to successfully realize the gasification program for RF regions over 2005 to 2007. During 2005 and 2007 the Regional Government plans to construct over 10 km pipelines within settlements, convert 14 heating plants and almost 4.5 thousand apartments to natural gas, gasify about 1.5 thousand of households. RUR 410 mln (from the Region’s budget) are to be committed to achieve the targets. We shall pay special attention to gasify villages. This is our priority”, underlined Valery Serdukov.

The network schedule signing was preceded by a working meeting between Dmitry Medvedev, RF First Deputy Prime Minister & Chairman of Gazprom’s Board of Directors and Valery Serdukov. The parties discussed issues on implementation of the gasification program for RF regions over 2005 to 2007 in the Leningrad Region.

Alexey Miller and Valery Serdukov also discussed issues on implementation of Agreement on cooperation between Gazprom and the Leningrad Region’s authorities.

Reference:

The Agreement on cooperation between the Government of Leningrad Region and Gazprom was signed for 5 years in April, 2003.

The Treaty on cooperation between Gazprom and the Government of Leningrad Region for 2006 determines the following aspects of joint work:

• Working out the general scheme to develop the Leningrad Region gasification for 2006-2015 to optimize supply and demand balance, provide the Leningrad Region with energy security and use the liquefied natural gas and local fuels;
• Municipal transport, agricultural machinery conversion to gas motor fuel;
• Development of integrated systems to provide industrial consumers with energy based on advanced high-tech gas saving technologies and equipment.

According to the Treaty, the Government of Leningrad Region: provides general scheme working out with investments to develop the Leningrad Region gasification over 2006-2015; ensures budget consumers’ 100% payment for the current gas supplies; controls accumulation and utilization of reserve fuels at gas consuming enterprises; punishes violators in accordance with the RF and Leningrad Region legislation in force, applies economically sound gas consumption rates for population; coordinates economically feasible tariffs for natural gas grid transmission.

Gazprom provides the region consumers with gas taking into account technical capacity of the gas transmission system, gas balance and takes part to gasify the Leningrad Region according to Conception of Gazprom’s participation in RF regions gasification.

The network schedule of gasification identifies an activity list and implementation dates for gas infrastructure between 2006 and 2007, and is aimed at providing gas connections to consumers immediately upon pipeline completion. To connect consumers, regional authorities are to construct local and household networks, build new or convert to gas existing heating plants, install household gas appliances, etc.

Network schedules are signed to implement Gazprom’s gasification program for RF regions over 2005 to 2007, which is funded with RUR 35 bln. Of this amount, RUR 5.2 bln was already committed in 2005. RUR 17.6 bln and RUR 12.2 bln is slated for 2006 and 2007, respectively. Extra RUR 1.1 bln will be allocated for the reconstruction and modernization of existing gas distribution pipelines.

At present the Russia-averaged level of gasification makes up 53 per cent including 60 per cent in cities & towns and 34 per cent in rural area.

Implementing the gasification program over 2005 to 2007 will already help boost gas supply to Russian regions to 60 per cent average by 2008 including 66 per cent in cities & towns and 42 per cent in rural area.

To achieve the said targets, Gazprom will provide gas to 3,851 thousand apartments & households including 2,673 thousand in cities & towns and 1,178 thousand in rural area.

The Program will enable Gazprom to convert to natural gas about 20 thousand new residential facilities (hospitals, kindergartens, schools, etc.), over 5 thousand heating plants in villages & settlements and more than 500 agricultural companies, more than 12 thousand km of pipelines to be laid and some 11 mln citizens of 53 Russian regions to be serviced.

Gazprom’s investment priorities for regional gasification are determined based on the following criteria: full payments for gas deliveries; repayment of gas debts; economic viability of projected gas infrastructure; customers’ readiness to receive gas; actual loading of gas laterals and distribution stations; assistance of RF regional authorities in promoting the use of compressed and liquefied natural gas as motor fuel.

In 2005 Gazprom provided the Leningrad Region consumers with nearly 4,5 bcm of gas and this year Gazprom plans to provide approximately the same volume of gas.

The Leningrad Region’s residential sector is currently gasified by 52 per cent including 66 per cent in towns and settlements and 27 per cent in rural area.