A group of the Company's experts led by Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee continues its business trip to the Far East.

During the meeting held in Vladivostok today and devoted to the Company's investment projects implementation in the Far Eastern regions it was noted that the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS) was nearing completion. By the moment, Gazprom has welded up 1,216 out of 1,350 kilometers or 90 per cent of the linear part forming the first startup complex of the pipeline with 1,100 kilometers trenched and covered with ground. Some 6,500 workers and experts, and 2,500 equipment units are involved in the GTS construction.

A total of 1.4 million tons of cargoes were delivered from different parts of the country during the project implementation including 1.1 million tons of large diameter pipes and over 0.1 million tons of process equipment. Over 30 thousand railway cars were used for this purpose.

Simultaneous construction of the gas distribution station in Vladivostok is underway. Buildings and equipment installation has been initiated there in parallel with an inter-settlement gas pipeline construction from the station to the Russky Island with a lateral to CHPP-2 in Vladivostok.

“In the third quarter Gazprom is to initiate gas deliveries to Vladivostok. By this time we will finish construction of the top-priority gas transmission facilities that will serve as the basis for a reliable gas transmission system in the Far Eastern region and will create conditions for the gasification development.

Successful implementation of the project is a precondition for rapid socioeconomic development of Eastern Russia giving hope to many people, particularly in the Primorsky and Khabarovsk Krais. Prioritized gas supply to Russian consumers is a cornerstone of the Company's activity,” Alexander Ananenkov stressed.

Following the meeting results, specific tasks were given to ensure timely commissioning of the Sakhalin – Khabarovsk – Vladivostok GTS first startup complex facilities and their preparation for tests.

Background:

Gazprom's expert groups take regular trips to the Far East. A group is made up of top managers from the Company's administration, its specialized subdivisions, subsidiaries and contracting agencies. The trips are primarily aimed at securing timely execution of the projects for 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.

The pipeline commissioning is scheduled for the third quarter of 2011. 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.