Today at the Gazprom headquarters Alexey Miller, Chairman of the Company's Management Committee and Vyacheslav Pozgalev, Governor of the Vologda Oblast signed an Agreement of Cooperation between Gazprom and the Vologda Oblast for 2011–2012.

The document reflects the parties' mutual interest in executing Gazprom's strategic projects within the region. These include construction of the Northern Tyumen Regions – Torzhok (SRTO – Torzhok), Gryazovets – Vyborg, Pochinki – Gryazovets gas pipelines and the Ukhta – Torzhok gas trunkline system.

The Agreement stipulates taking of actions in the Vologda Oblast as part of the Russian Regions Gasification Program as well as elaboration and execution of programs to promote the use of natural gas as a transport fuel.

According to the document, the Vologda Oblast Government will render assistance to Gazprom in coordinating all operations related to the Company's strategic projects execution in the region including the land allocation issues.

The Oblast Government will elaborate and adopt the schedule for converting local enterprises to standby fuels during cold snaps and establish control over timely acquisition of necessary standby fuel reserves. The Oblast Government is also obliged to timely prepare consumers for gas deliveries.

The Company will consider the possibility to commission this year gas laterals to the village of Berezovaya Slobodka, Nyuksensky District and to the settlement of Turovets, Mezhdurechensky District ahead of schedule. The cooperation program also stipulates constructing a gas lateral to the towns of Kirillov, Belozersk, Lipin Bor, Vytegra and a gas lateral to the town of Kharovsk.

Background:

Gazprom and the Vologda Oblast Government signed the open-ended Agreement of Cooperation in June 2003.

The gasification level in the Vologda Oblast is at 53.8 per cent including 78.7 per cent in cities and towns and 14.5 per cent in the rural area. The identical figures throughout Russia amount to 63.2, 67.5 and 45.5 per cent respectively.

In 2010 Gazprom invested RUB 75 million in the Vologda Oblast gasification to construct two inter-settlement gas pipelines. This year the Company will allocate RUB 100 million for further construction of these gas pipelines.

At present, Gazprom is performing expert evaluation of investment rationales for the construction of a gas lateral to the towns of Kirillov, Belozersk, Lipin Bor, Vytegra and a gas lateral to the town of Kharovsk. The gas pipeline construction will provide natural gas to some 66 thousand people.