Gazprom's group of experts led by Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee finished a business trip to the Far East.

Yuzhno-Sakhalinsk hosted a meeting on creation of the priority gas transmission facilities in the Far East as part of the state-run Eastern Gas Program implementation.

Shaping of the Unified Gas Supply System in Eastern Russia creates the required conditions for sustainable socioeconomic development, growth in commercial output, gasification development, wealth and environmental improvement in a number of the Far Eastern regions.

A high degree of readiness of the key facilities within the first Far Eastern Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS) was highlighted in the course of the meeting. By now, 1,333 kilometers (99 per cent) of the 1,350 kilometer long linepipe have been welded as part of the first startup complex, 1,277 kilometers have been trenched and buried. The sections constructed by now are being tested making 400 kilometers of the linepipe so far. Simultaneous efforts are being taken to construct operations bases for the Amur, Khabarovsk and Primorsky Line Pipe Operation Centers.

Shortly after finishing tests of the linear part Gazprom will start feeding gas into the Sakhalin – Khabarovsk – Vladivostok gas pipeline. In September 2011 natural gas will be delivered to Vladivostok including the 2012 APEC Summit venues on the Russky Island.

Based on the meeting results, specific tasks were given to ensure timely implementation of the Company's investment projects in the Far East.

Background

Gazprom's expert groups take regular trips to the Far East. A group is made up of top managers from the Company, its specialized subdivisions, subsidiaries and contracting agencies. The trips are primarily aimed at monitoring the execution of the projects on shaping the Unified Gas Supply System in Eastern Russia on the basis of the Company's resource base.

The September 2007 Order by the Russian Federation Industry and Energy Ministry approved the Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program). Gazprom was appointed by the Russian Federation Government as the Program execution coordinator.

The Eastern Gas Program gives priority to the creation and development of the Sakhalin – Khabarovsk – Vladivostok gas transmission system. Launched in July 2009, the GTS construction is targeted at developing gas supplies to the Khabarovsk Krai and the Sakhalin Oblast as well as arranging gas deliveries to the Primorsky Krai. The 1,350 kilometer first startup complex of the gas pipeline with the annual capacity of 6 billion cubic meters is to be brought onstream in the third quarter of 2011.

The total design length of the gas pipeline from the GDS in Vladivostok to the Russky Island with a lateral to CHPP-2 in Vladivostok is some 34 kilometers: more than 15 kilometers on the mainland, some 12 kilometers on the Russky Island and more than 6 kilometers (two strings: main and backup) under the Eastern Bosphorus Strait.

Gas from the Sakhalin – Khabarovsk – Vladivostok GTS will be delivered to CHPP-2 and utilized for heat and power supply to the 2012 APEC Summit venues. Conversion of CHPP-2 from coal to gas will ensure more reliable power supply to consumers in Vladivostok significantly improving the environmental situation in the city.