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December 24, 2007

On meeting concerning gas supply to and gasification of Far Eastern Federal District

A joint meeting between the Far Eastern Federal District Administration and Gazprom delegation was held today in Khabarovsk devoted to the matters of gas supply and gasification of the region.

The Meeting was chaired by Oleg Safonov, Presidential Envoy to the Far Eastern Federal District (FEFD) and Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee. The Meeting was attended by the heads of the Russian Federation constituents comprising FEFD and Gazprom subsidiaries – Mezhregiongaz, Tomsktransgaz, Promgaz and Giprospetsgaz.

Alexander Ananenkov emphasized in his speech that Gazprom was considering the gas industry development in the Far East an important part of the plans for the regional socioeconomic development.

“The gas industry will allow to raise the level of financial and economic stability in FEFD and social attractiveness of the region, create new jobs, enhance labor conditions,” said Alexander Ananenkov.

In addition, he noted that Gazprom as Eastern Program coordinator by order of the Russian Government was considering the development of the resource base, unified gas transport system and gasification of consumers as its principle goals in the Far East.

Alexander Ananenkov paid special attention to the issue of setting up gas processing and helium industries in the Far East as well as establishing hi-tech helium-based facilities, including those for defense purposes. It was noted that the development of LNG production facilities was also of great importance.

The speaker drew the participants’ attention to the fact that the implementation of the Eastern Program would require reconstruction of many obsolete machine building facilities in FEFD as well as a significant increase in technical and technologic level of such facilities. In addition, new steelworks, pipeline manufacturing and machine building plants will be needed.

“In order to increase the effectiveness of this work, it is reasonable to develop industrial cooperation with foreign companies,” said Alexander Ananenkov in conclusion.

The meeting resulted in the taking of the decisions aimed at ensuring effective implementation of the Eastern Program in the Far Eastern Federal District.


The Far Eastern Federal District comprises the Republic of Sakha (Yakutia), Kamchatka, Primorsky and Khabarovsk Krais, Amur, Magadan and Sakhalin Oblasts, Jewish Autonomous Oblast, Chukotka Autonomous Okrug.

The September 3, 2007 Order of the Russian Federation Industry and Energy Ministry approved the Development Program of the integrated gas production, transportation and supply system with due regard of possible export to Chinese and Asia-Pacific markets (Eastern Program). Gazprom was appointed as the Russian Federation Government coordinator to execute the Program.

Pursuant to the document it is planned to construct four new gas production centers in the Sakhalin Island, Republic of Sakha (Yakutia), Krasnoyarsk Krai and Irkutsk Oblast. On April 18, 2007 Gazprom finally entered the Sakhalin II project as a leading shareholder in Sakhalin Energy owning a 50 per cent stake plus one share.

The Eastern Program execution will enable firstly to satisfy current and perspective gas needs in Eastern Siberia and the Far East and to start up exporting pipeline gas and LNG to the Asia-Pacific region.

The Federal Task-Oriented Program on Economic and Social Development of the Far East and Zabaikalye until 2010 proceeds from the need to advance the regional economy growth rate. The gas pricing should be based on market principle due to the energy competition.

The Eastern Program additionally foresees the construction of the Sakhalin-Khabarovsk-Vladivostok gas transportation system. The system will enable to supply gas to the majority of consumers of the Khabarovsk and Primorsky Krais, Jewish Autonomous Okrug and the Sakhalin Oblast. The Sakhalin I project is the only source to supply gas to the said constituents of the Far Eastern Federal District in a mid-term perspective.

In the frames of the Eastern Program execution Gazprom signed the Memorandums of Understanding with Plenipotentiaries of the Russian Federation President in the Siberian and Far Eastern Federal Districts, as well as the Agreements of cooperation and Gasification Accords with the Primorsky, Khabarovsk, Krasnoyarsk Krais, Sakhalin and Irkutsk Oblasts Administrations, Agreement of cooperation with the Sakha Oblast (Yakutia) authorities. The Gasification Accords with the Amur Oblast Administration and Kamchatka Krai are under preparation.

The General Scheme of gas supply and gasification of the Irkutsk Oblast Administration is under execution. Particularly, the gas pipeline construction to Bratsk is at the final stage. The first consumers in the Irkutsk Oblast are planned to be gasified during 2007-2008.

Gazprom arranges a deal to acquire stakes in the authorized capital of RUSIA Petroleum and East Siberian Gas Company furthering development of the General Scheme of gas supply and gasification of the Irkutsk Oblast.

The key points of the General Scheme of gas supply and gasification of the Far Eastern Federal District were developed.

Gazprom Invest Vostok a general customer & constructor service was set up with a view to build-up Gazprom production facilities in Russia’s East. Gazprom established the Representative Office in Sakhalin. The regional services of Tomsktransgaz were set up in the towns of Yuzhno-Sakhalinsk and Vladivostok.

Pursuant to the instructions of Russian Federation President Vladimir Putin following the results of the meeting dedicated to the socioeconomic development of the Kamchatka Krai as well as the meeting chaired by Viktor Zubkov, Prime Minister of the Russian Federation resulted in Gazprom entering the gas pipeline construction project from the Sobolevsky region to Petropavlovsk-Kamchatsky. The gas pipeline construction is planned to end up in 2010. The gas pipeline commissioning will enable to develop gas supply projects in the Kamchatka Krai.




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