Oleg Betin and Alexey Miller sign the 5-year Cooperation Agreement between Gazprom and the Tambov Region’s Administration

Today, at Gazprom’s Headquarters, Alexey Miller, Gazprom’s Management Committee Chairman and Oleg Betin, Head of the Tambov Region’s Administration signed the 5-year Cooperation Agreement.

The parties emphasized the considerable progress achieved in building up the Tambov Region’s gas infrastructure. In 2002-2003 some 3 thousand km of gas pipelines were brought into operation in the Region, allowing the parties to expand gas deliveries from 45% to 54%, including from 66% to 72%, in the cities and from 14% to 26%, in rural settlements.

Under the Agreement signed today, Gazprom and the Tambov Region’s major businesses will be as follows:

• Developing the gas supply network of localities;
• Ensuring stable gas deliveries to population and state-financed bodies;
• Developing and improving the system of sustained gas deliveries to end-use consumers;
• Developing capacities to utilize liquefied and compressed gas as engine fuel;
• Developing and introducing gas saving technologies;
• Ensuring environmental safety and rational nature management;
• Devising and implementing the program for increasing the gas consumption measurement accuracy and metrological maintenance;
• Developing a comprehensive automated gas consumption and quality measurement system;
• Implementing housing building programs intended for Gazprom’s current and retired employees re-settled from the Extreme North.

According to the Agreement, the Tambov Region’s Administration took the commitment to make full payments for current and previous gas deliveries made to state-financed bodies and to thoroughly offset Gazprom’s losses arisen in granting natural gas subsidies to eligible consumer categories. In addition, the Regional authorities will assist Gazprom in receiving timely gas payments from the consumers paying for gas deliveries on their own.

The Regional Administration will timely regulate, within its authority, retail consumer gas prices and approve differentiated household gas prices.

The Tambov Region is planned to be furnished with payment and settlement centers as well as with an integrated fuel and energy payment processing system. Special gas transmission tariff caps (coordinated with gas distribution companies), intended for financing gas supply programs will be introduced, as well. The Regional Administration will exercise control over the purpose-oriented allotment of funds arisen from introducing the above-mentioned tariff caps.

Gazprom, in its turn, takes the commitment to provide secure gas deliveries to Regional consumers, taking into consideration the production capacities of the United Gas Transmission System, solvent demand and consumers’ gas payment ratio.

Reference:

Gazprom and the Tambov Region first signed a 5-year Cooperation Agreement in December 1998. To implement the Agreement, in April 2003 the parties signed the Agreement on developing the Tambov Region’s gas supply network.

In 2003 Gazprom delivered over 1.8 bcm of natural gas to the Tambov Region.

As of 1 April 2004, the Regional consumers’ gas debt averaged RUR 141 million. Current gas deliveries are paid for at 95.9%.

DIVISION OF RELATIONS WITH MASS MEDIA