The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Pavel Ipatov, Governor of the Saratov Oblast.

The parties discussed the progress with the Cooperation Agreement between Gazprom and the Saratov Oblast Government. The discussion centered on the gasification prospects in the region. Special attention was paid to additional gas supply to the Balakovo District and the city of Engels, as well as to re-construction of gas distribution stations (GDS) in the cities of Saratov and Yershov and a gas lateral at the GDS of the city of Khvalynsk.

The meeting emphasized that the Saratov Oblast consumers need to strictly observe the payment discipline and to settle the gas debt for the previous years.

Background:

The Cooperation Agreement was entered into by Gazprom and the Saratov Oblast Government in September 2002 and extended in August 2007.

Natural gas penetration in the Saratov Oblast accounts for 94.5 per cent including 97.6 per cent in cities and towns and 85.4 per cent in the rural area. The identical figures throughout Russia amount to 63.2, 67.5 and 45.5 per cent respectively.

Between 2006 and 2008 Gazprom invested RUB 560 million to promote gasification in the Saratov Oblast.

In 2009 the Company allocated another RUB 340 million to construct five inter-settlement gas pipelines with the total length of some 107 kilometers. On its part, the Oblast Government last year sponsored the construction of 63 kilometers of distribution pipelines and the conversion of 28 boiler houses and 994 households to natural gas.

In 2010 Gazprom allotted another RUB 20 million to gasify the Saratov Oblast. The funds were used to launch the construction of six inter-settlement gas pipelines and to engineer four inter-settlement gas pipelines.

The Saratov Oblast consumers’ gas arrears increased by RUB 566.8 million from January to April 2010 and amounted to RUB 2.35 billion as of May 1, 2010. The bulk of the debt is owed by the residential sector and household utilities.