Today in Bratsk Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee, and Dmitry Mezentsev, Governor of the Irkutsk Oblast signed a new Accord on Gasification.

Pursuant to the document, the parties are obliged to jointly develop and implement the programs for the Irkutsk Oblast gasification, as well as to promote the regional gas market.

The Accord stipulates elaboration and implementation of the following documents aimed at the gas industry shaping in the Irkutsk Oblast:

- investment project on gasification;

- joint energy strategy providing for indigenous hydrocarbon resources inclusion into the local fuel and energy balance;

- short-term fuel and energy balances;

- regional energy saving program.

The investment project on the Irkutsk Oblast gasification contains investment proposals on gas supply facilities construction, justification of investments and construction timing for these facilities, as well as design and estimate documentation.

The investment project on gasification will tackle the following issues:

- utilization of gas from the fields located in the Irkutsk Oblast;

- gasification of the regions detached from gas trunklines through the use of liquefied petroleum gas (LPG) and liquefied natural gas (LNG), and through the application of state-of-the-art technologies and distributed energy facilities;

- comprehensive gas utilization including heat and power generation;

- ensuring that the gas supply and gasification facilities being put into operation are loaded;

- ensuring security of gas supply to consumers;

- creation of a gas flow monitoring and metering system;

- introduction of the gas-powered equipment and technologies raising gas utilization efficiency.

The investment project on gasification will lay the basis for creating phased gasification programs for the Irkutsk Oblast and for defining the finance sources and schemes.

The gasification programs for the Oblast will be executed in compliance with the annually approved synchronization schedule.

Under the Accord on Gasification, the parties will create the environment for natural gas purchase and sale at the market prices to be defined with a glance to the prices of the fuels being replaced with gas in the gasified area, as well as to the advantages of gas in terms of application technologies and environmental parameters.

In addition, the parties will carry out joint activities to expand natural gas utilization as a motor fuel in the Irkutsk Oblast.

The Irkutsk Oblast Government jointly with the local municipal authorities will ensure preparation of the residential sector, utility and welfare facilities for gas supplies, including construction of external and internal gas pipelines from gasification facilities to gas-powered equipment connection points, as well as mandatory installation of gas meters.

The Accord on Gasification of the Irkutsk Oblast is effective for an indefinite period.

Background:

Gazprom and the Irkutsk Oblast Administration signed the Agreement of Cooperation in February 2004. The General Scheme of gas supply to and gasification of the region was elaborated in 2005 and updated in 2009. The former Accord on Gasification was signed in 2005.

Between 2007 and 2009 Gazprom allotted RUB 595 million to gasify the Irkutsk Oblast. These funds were used to build two inter-settlement gas pipelines (the Osinovka gas distribution station – the settlement of Zyaba and the Osinovka gas distribution station – the settlement of Gidrostroitel).