Yakutsk hosted today a joint meeting of Gazprom and the Republic of Sakha (Yakutia) Government dedicated to formation of the Yakutia gas production center as part of the Eastern Gas Program. Moderating the meeting were Alexey Miller, Chairman of the Gazprom Management Committee and Vyacheslav Shtyrov, President of the Republic of Sakha (Yakutia).

The meeting brought together Yegor Borisov, Prime Minister of Yakutia’s Government; Valery Golubev, Deputy Chairman of the Gazprom Management Committee; Members of the Gazprom Management Committee: Oleg Aksyutin, Head of the Gas Transportation, Underground Storage and Utilization Department; Viktor Ilyushin, Head of the Department for Relationships with Regional Authorities of the Russian Federation; and Vsevolod Cherepanov, Head of the Gas, Gas Condensate and Oil Production Department. Taking part in the meeting were also heads and experts from Gazprom’s specialized subdivisions and subsidiaries, as well as representatives from federal and regional executive bodies.

Addressing the meeting, Alexey Miller underlined that the Eastern Gas Program implementation was among Gazprom’s strategic priorities at the moment. He particularly mentioned the tough deadline set by the Government for bringing onstream the prioritized facilities in Yakutia: launching the Yakutia – Khabarovsk – Vladivostok gas transportation system (GTS) construction in 2012, starting oil and gas production from the Chayanda field – 2014 and 2016, accordingly. In parallel, the top-priority gas processing and gas chemical facilities are to be put onstream in 2016. When completed, these facilities will make a great contribution to the efficient development of the Chayanda field with its multi-component gas containing helium.

Creation of the Yakutia gas production center within the state-run Eastern Gas Program will demand coordinated efforts of Gazprom, federal and regional authorities. When creating the Yakutia gas production center, Gazprom focuses on the comprehensive approach involving the synchronized commissioning of facilities. To achieve this goal, a particular detailed plan of cooperation between Gazprom and Yakutia’s Government is to be worked out.

Alexey Miller stated that Gazprom was intensively exploring the Chayanda field and had already completed a great scope of seismic survey and drilled initial wells. The schedule of activities on the Chayanda field development was adopted.

The Gazprom Management Committee Chairman highlighted that engineering of hydrocarbons production, transportation and processing facilities had to be stepped up. That is also required to ensure synchronization with a series of Yakutian infrastructure projects partially funded from the federal budget. At the moment, a new energy supply, network and transportation infrastructure is being intensively shaped in the Republic and the project decisions being adopted should be optimal and meet the needs of gas workers, inter alia.

“Federal support could contribute significantly to the progressive development of the gas industry in Eastern Russia. This is especially important during the payback period,” said Alexey Miller.

Optimal loading of the Yakutia – Khabarovsk – Vladivostok GTS with at least 30 billion cubic meters of gas per annum will be very important for efficient development of the Yakutia Center through involvement of all regional gas resources. In this regard, Gazprom submitted requests to the Federal Subsoil Resources Management Agency for obtaining the right to use the subsoil resources of the Srednetyungskoye, Tas-Yuryakhskoye, Sobolokh-Nedzhelinskoye and Verkhnevilyuchanskoye fields listed as the fields of federal significance.

“Developing gas supply to and gasification of Yakutia is a crucial issue of the cooperation between Gazprom and the Republic. At the same time, the Company is ready not only to start the gasification of Yakutia’s southern regions from 2016, when the first indigenous gas extraction in the Chayanda field is to be commenced, but to take part in earlier local gasification projects as well,” stressed Alexey Miller.

He also paid attention to the fact that the Yakutia gas production center creation and development envisaged engagement of highly qualified personnel, who might take pre-training courses in the Republic. In this context, Gazprom supports the decision by Yakutia’s Government to set up in Yakutsk a specialized department in the Northeastern Federal University.

Following the meeting results, Alexey Miller and Vyacheslav Shtyrov signed the Protocol providing for a set of measures aimed at more efficient implementation of Gazprom’s projects in Yakutia within the approved timeframe.

The parties also signed the General Scheme of gas supply to and gasification of the Republic of Sakha (Yakutia).

Background:

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) was adopted by the September 2007 Order of the Russian Federation Energy Ministry. Gazprom was appointed by the Russian Government as the Program execution coordinator.

According to the November 2008 decision by the Gazprom Board of Directors, the Company’ paramount objective in Eastern Russia is resource base development and preparation for hydrocarbons commercial extraction in the aim of implementing gas supply projects in Eastern Siberia and the Far East including in the Republic of Sakha (Yakutia).

It is projected to create the Sakhalin, Yakutia, Krasnoyarsk, Irkutsk and Kamchatka gas production centers in Eastern Russia.

In accordance with the Russian Federation Government Directive of April 16, 2008 Gazprom, as the owner of the Unified Gas Supply System, was entitled to the license for the Chayanda oil, gas and condensate field – the basic field for the Yakutia gas production center. The field’s C1+C2 reserves make up 1.24 trillion cubic meters of gas and 68.4 million tons of oil and condensate. In 2009 Gazprom launched 2D and 3D seismic surveying in the field, drilled two exploratory wells and made preparations to drill the third one.

In March 2009 the Russian Government adopted the investment certificate for the comprehensive investment project permitting to elaborate the project documentation on South Yakutia development. The Investment Project for South Yakutia Comprehensive Development stipulates establishing in Eastern Russia a new large industrial region based on mineral and hydropower resources of the Republic of Sakha (Yakutia) including the Chayanda field.

In June 2009 Gazprom joined the Investment Agreement to implement the Comprehensive Investment Project aimed at elaborating project documentation for the Investment Project for South Yakutia Comprehensive Development, backed by the Russian Government and financed from the Russian Federation Investment Fund budget. According to the document, Gazprom is planning to act as a co-investor of the South Yakutia Comprehensive Development Project, for instance, with a view to create the Yakutia gas production center.

The Agreement of Cooperation between Gazprom and the Republic of Sakha (Yakutia) was signed in July 2007 and Accord on Gasification – in June 2008.