A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Alexander Khoroshavin, Governor of the Sakhalin Oblast has been convened today at the Company’s headquarters.

The parties addressed the progress in implementing the Agreement of Cooperation between Gazprom and the Sakhalin Oblast Administration, as well as the Company’s future activities in the region.

A focus was placed on the interaction between Gazprom and the Oblast Administration within the Eastern Gas Program including, inter alia, the Sakhalin Gas Production Center creation and the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS) construction.

In addition, Alexey Miller and Alexander Khoroshavin discussed the Sakhalin Oblast gasification.

Background:

Gazprom and the Sakhalin Oblast Administration entered into the Agreement of Cooperation on September 14, 2006 and into the Accord on Gasification on November 15, 2006.

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. Gazprom was appointed by the Russian Federation Government as the Program execution coordinator.

The Program stipulates the prioritized construction and development of the Sakhalin – Khabarovsk – Vladivostok GTS launched in July 2009. The first start-up complex of the Sakhalin – Khabarovsk – Vladivostok GTS will be brought onstream in the third quarter of 2011.

Natural gas penetration in the Sakhalin Oblast averages 8.4 per cent, while throughout Russia it stands at 63.2 per cent.

In 2009 Gazprom developed the General Scheme for gas supply to and gasification of the Sakhalin Oblast. Last year the Company allocated RUB 70 million to design an inter-settlement gas pipeline from the Dalneye gas distribution station (GDS) to the Yuzhno-Sakhalinsk CHPP-1.

In 2010 the Company will invest another RUB 550 million in the regional gasification. These funds will be used to construct and put onstream the Dalneye GDS – Yuzhno-Sakhalinsk CHPP-1 gas pipeline and to design the Dalneye GDS – Novo-Alexandrovsk settlement gas pipeline.

On its part, the Sakhalin Oblast Administration is going to put onstream 6.5 kilometers of intra-settlement gas pipelines, as well as to prepare 160 households and 3 boiler houses for gas supplies.