Saint Petersburg hosted today a meeting moderated by Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee and devoted to designing and constructing the Ukhta – Torzhok, Pochinki – Gryazovets, Gryazovets – Vyborg, SRTO – Torzhok gas pipelines, line compressor stations, and expanding the Gryazovets gas transmission hub in Northwestern Russia.

Taking part in the meeting were Yaroslav Golko, Member of the Gazprom Management Committee – Head of the Investment and Construction Department, heads and experts from the Company's specialized subdivisions, subsidiaries and contracting companies.

The meeting participants stressed that Gazprom was actively implementing gas transmission projects in Northwestern Russia.

Notably, 57.5 kilometers of the Pochinki – Gryazovets linepipe have been welded up and trenched since early 2011 making 55 per cent of the overall pipeline length (some 650 kilometers) with due account for 300 kilometers constructed last year.

Construction and assembly operations are underway at three compressor stations (CS) of the gas pipeline – Ivanovskaya, Lukoyanovskaya, and Vyaznikovskaya. Startup operations are to be initiated at the Ivanovskaya and Lukoyanovskaya CS at an early date. Construction of the linepipe and the two CSs is to be completed in the third quarter this year.

Construction of the Ukhta – Torzhok gas pipeline has been started: the pipeline is being welded up, 260 kilometers of pipe products were delivered to construction sites. Vacuum drying operations are ongoing at the Gryazovets – Vyborg gas pipeline in parallel with its expansion using loopings, and new gas compressor facilities are being pre-commissioned at the Gryazovetskaya CS.

Previously, a group of Gazprom experts had visited the Portovaya CS construction site located on the Baltic Sea coast near Vyborg, Leningrad Oblast.

The construction and assembly operations which employ 3,500 workers and experts are underway there at the moment. The main equipment of the top priority compressor facilities (210 MW) is nearly installed, in particular gas compressor units and gas treatment unit equipment.

Based on the activity results, the Company's specialized subdivisions, subsidiaries and contracting companies were tasked to ensure timely execution of the projects.

Background:

Gazprom is taking large-scale efforts to develop the Russian gas transmission system (GTS) and diversifying gas export routes in parallel with building up gas production capacities. In this respect, northwestward expansion of the GTS has a particular significance. It is required for secure gas transmission from the Yamal Peninsula where a new gas production center is emerging as well as for timely delivery of natural gas into the Nord Stream offshore gas pipeline and for increasing the reliability of gas supplies to consumers in Northwestern Russia.

The work is currently being performed to expand the Gryazovets gas transmission hub which is a crucial component of the Northern gas transmission corridor. The Gryazovets hub will convey gas to the Nord Stream offshore gas pipeline starting from September 2011. The Gryazovetskaya CS is a key facility of the Gryazovets hub. The work is underway to increase the station capacity from 264 to 389 MW.

Nord Stream will be fed from the Gryazovets – Vyborg gas pipeline. Its length is 900 kilometers and nominal capacity – 55 billion cubic meters of gas. The gas pipeline runs across the Vologda and the Leningrad Oblasts. Domestically manufactured pipes and new generation shutoff valves are used for the linepipe. The pipeline crossings through large watercourses are built using the horizontal directional drilling and microtunneling techniques, which allowed avoiding an impact on river ecosystems during the gas pipeline construction and operation process. The gas pipeline will be commissioned in a phased manner starting from 2011. The gas pipeline is to achieve the nominal capacity by late 2012.

The Pochinki – Gryazovets gas pipeline construction is oriented at raising the UGSS reliability and flexibility in the Northwestern and Central regions. Initially, the pipeline will secure additional gas supplies to the Northwestern region and, inter alia, convey gas to the Nord Stream gas pipeline. Further on, with the first natural gas deliveries from Yamal, the gas pipeline will be switched to reverse flow and gas will be rerouted to the Central region.

The Pochinki – Gryazovets gas pipeline will run across the Nizhny Novgorod, Vladimir, Ivanovo, Yaroslavl and Vologda Oblasts. The 1,420-millimeter pipeline will stretch approximately 650 kilometers and operate at the working pressure of 75 atmospheres. Its full throughput will reach 36 billion cubic meters a year. The pipeline construction was launched in September 2007.

The Ukhta – Torzhok gas trunkline system is designed for the Yamal gas delivery to the Central region. It will be 1,300 kilometers long with the annual throughput of 90 billion cubic meters and working pressure of 100 Ata.

The Portovaya CS will ensure gas transmission via the Nord Stream gas pipeline. It will be a unique gas transmission facility in terms of aggregate capacity (366 MW), working pressure (220 Ata), gas transmission distance (1,200 kilometers) and daily gas dehydration volume (170 million cubic meters). In the course of the station construction Gazprom utilizes novel equipment and cutting-edge, innovative technologies.