The Gazprom Management Committee has heard a report on the Company’s energy saving and environmental activities between 2000 and 2005, and the major projections for 2007 through 2010.

Gazprom’s core business units were entrusted with developing and submitting for approval a draft Gazprom Energy Saving Program for 2007 through 2010, a restated draft Environmental Policy and a priority activity list for the environmental protection sector.

The Management Committee ordered to prepare and submit for approval proposals on the creation of the Gazprom Coordinating Council for Environmental Protection Issues.

The Management Committee particularly emphasized that, despite growing gas production and transmission volumes, the implementation of the corporate energy saving policy had resulted in the amount of methane as the main component of the atmospheric emissions remaining practically unchanged. According to the Max Planck Institute and the Wuppertal Institute for Climate, Environment and Energy, a weighted average methane emission rate at UGSS (Unified Gas Supply System) transmission facilities and gas export pipelines accounts for as little as 0.8 per cent and does not exceed 0.7 per cent, respectively.

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Gazprom implements its energy saving and environmental activities in compliance with the requirements of the existing RF legislation, OAO Gazprom Energy Saving Conception for 2001 through 2010 and corporate energy saving programs. While implementing the programs for 2002 through 2005 Gazprom’s subsidiaries saved 13.9 mtce including 11.6 bcm of natural gas; some 1.8 bln kW/h of electricity; 914.2 thousand Gcal of thermal power and 15 ktce of diesel fuel. The energy saving program implementation between 2002 and 2005 enabled to cut the intra-corporate natural gas and electricity consumption rates by an average of 5 and 3 per cent, respectively.

It is projected that the major improvement principles for the energy saving management process over 2007 to 2010 will be as follows: taking steps that would produce a maximum energy conservation effect with minimum financial expenditures; planning and conducting energy saving measures in tighter conjunction with the Company’s cost reduction plans and programs; promoting energy saving initiatives on a systematized basis.

According to provisional estimations, stepping up energy conservation measures between 2007 and 2010 will help save 11 mtce. Thus, the energy saving effect will be somewhat lower versus the 2002-05 period as the bulk of the energy conservation potential has been realized within said time frame. At the same time, just like in previous years, 80-85 per cent of the overall energy saving volume is planned to be achieved in the long-distance gas transmission sector.

Gazprom’s environmental protection activities are regulated by the RF legislation and the OAO Gazprom HSE Policy.

Despite the considerable production growth Gazprom not only practically keeps up with existing standards but sometimes even mitigates the main environmental effects.

In particular, atmospheric emissions are below 60 per cent of the statutory level, with the highest ecological effect achieved in the gas transmission sector due to the upgrading of compressor stations, replacement and modernization of gas pumping units.

Being on a continuous increase, overall funds committed by the Company for environmental purposes exceeded RUR 6 bln last year.

Gazprom intends to further improve its environmental protection activities and is currently engaged in creating at the corporate level an environmental inspection unit, analyzing issues in relation to technical environmental impact regulations, carrying out the work to introduce state-of-the-art ecological monitoring systems and formulating proposals to utilize the Kyoto Protocol mechanisms. The above and other aspects will be covered in a restated Environmental Policy of Gazprom.