Gazprom's group of experts led by Alexander Ananenkov, Deputy Chairman of the Company's Management Committee has finished its business trip to the Komi Republic and the Yamal-Nenets Autonomous Okrug.

The Company's experts visited the Bovanenkovo field which is of primary significance for the Yamal megaproject. The field serves as the basis for establishing the Yamal gas production center.

Alexander Ananenkov moderated a meeting in Nadym. It was highlighted that construction of process facilities of the first startup complex within the Bovanenkovo field pre-development was progressing on schedule.

Equipment has been installed at the comprehensive gas treatment unit (CGTU) module 1 and a gas gathering system has been constructed. Preparations are being made for hydraulic testing of the CGTU and gas well clusters.

Drilling of gas production wells is underway. A total of 143 wells have been drilled and downhole equipment has been run into 82 wells since the construction launch. In the nearest future the field's drilling capacities will be enhanced – an additional drilling rig is being transported to the field.

In general, by the mid-2011 the Bovanenkovo field saw the commissioning of 83 pre-development facilities including a state-of-the-art shift workers' camp, power generating, heat, water and gas supply facilities, sewage treatment plants and medical aid stations.

The meeting paid special attention to developing Gazprom's production facilities in the Nadym-Pur-Taz region. It is projected to put onstream the Nyda area with the nominal capacity of 2 billion cubic meters of gas per annum in the Medvezhye field. Alexander Ananenkov and the expert group visited today pre-development facilities of the Nyda area. There, installation and construction activities go on at the CGTU, 22 wells have been drilled and hydraulic testing is scheduled for mid-August of 2011.

Based on the meeting results, Gazprom's specialized structural units, subsidiaries and contracting companies were tasked to ensure timely implementation of the Company's investment projects within the Yamal megaproject as well as in the Nadym-Pur-Taz region.

Background

The Yamal Peninsula is a region of Gazprom's strategic interests. Commercial development of the Yamal fields will increase local gas production to 310–360 billion cubic meters per annum by 2030. Accessing Yamal is very important for ensuring domestic gas production growth.

32 fields were discovered in the Yamal Peninsula and the adjacent offshore areas with aggregate ABC1+C2 reserves and C3 resources reaching 26.5 trillion cubic meters of gas and some 1.64 billion tons of oil and condensate. The Bovanenkovo field is the most significant one on the Yamal Peninsula as its ÀÂÑ1+Ñ2 gas reserves amount to 4.9 trillion cubic meters.

In December 2008 Gazprom commenced practical implementation of the Yamal megaproject. The Company started the operations aimed at the Bovanenkovo field development and the Bovanenkovo – Ukhta gas trunkline system (GTS) construction. Commissioning of the first startup complexes for the Cenomanian-Aptian deposits pre-development in the field and the GTS construction are scheduled for the third quarter of 2012.

Projected gas production in the Bovanenkovo field is estimated at 115 billion cubic meters per annum to be increased to 140 billion cubic meters in the long term.