Led by Alexander Ananenkov, Deputy Chairman of Gazprom Management Committee, a Gazprom delegation paid a working visit to the Kamchatka Krai. Viktor Ilyushin, Member of Gazprom Management Committee and Head of the Department of Relationships with Regional Authorities of the Russian Federation joined the delegation.

Within the visit Alexander Ananenkov held a working meeting dedicated to the Gas Supply to the Kamchatka Oblast, Phase 1 – Gas Supply to Petropavlovsk-Kamchatsky investment project stipulating construction of a gas pipeline to deliver gas from eastern Kamchatka fields to Petropavlovsk-Kamchatsky, drilling activities and field pre-development. Taking part in the meeting were heads and experts from Gazprom Administration specialized subdivisions, subsidiary companies and contracting agencies.

The meeting positively appreciated the gas pipeline construction pace. Alexander Ananenkov underlined the necessity to continue following the prescribed implementation terms.

Based on the meeting results Gazprom’s subdivisions and subsidiaries were entrusted with the tasks aimed at securing the timely implementation of projects on gas supply to the Kamchatka Krai.

Gazprom’s delegation participated in the talks on the regional gas supply issues held among representatives from Russian Energy Ministry, Russian Regional Development Ministry, the Kamchatka Krai Government and RAO ES Vostok. Special attention was paid to the synchronization of activities carried out by the participants of gasification projects in the Kamchatka Krai. It was also pointed out that the appropriate infrastructure for on-site gas utilization had to be timely constructed and developed.

The talks were followed by the meeting between Alexander Ananenkov and Alexey Kuzmitsky, Governor of the Kamchatka Krai. The parties discussed the progress in the Cooperation Agreement and the Gasification Accord between Gazprom and the Kamchatka Krai Government.

Special emphasis was placed on the timely preparation of regional consumers for gas supplies and the construction of inter-settlement gas distribution pipelines. The parties also discussed the issue of timely allocation of land plots near Petropavlovsk-Kamchatsky required for the construction of gas laterals.

Background:

In September 2007 Russian Government adopted the decision prescribing Gazprom to join the Gas Supply to the Kamchatka Oblast, Phase 1 – Gas Supply to Petropavlovsk-Kamchatsky project.

As part of the project Gazprom is pre-developing the Kshukskoye and Nizhne-Kvakchinskoye fields on the western coast of the Kamchatka Peninsula and is constructing the Sobolevo – Petropavlovsk-Kamchatsky gas trunkline projected for commissioning in 2010. The project also stipulates developing gas distribution networks in Petropavlovsk-Kamchatsky.

The total length of the gas pipeline accounts for 392 km, of which around 230 km of pipes have been welded and trenched. Preparation activities are underway to launch production drilling in the Kshukskoye and Nizhne-Kvakchinskoye fields.

In 2008 Gazprom allocated RUB 1.1 billion and RUB 4.8 billion for the development of the fields and for the construction of the Sobolevo – Petropavlovsk-Kamchatsky gas trunkline.

The 2009 Program stipulates to commit RUB 0.8 and 11.8 billion for the same purposes as well as RUB 1.4 billion for operational drilling.

In 2009 the Kamchatka Krai was for the first time involved into the Gazprom’s gasification program. Under the Program the Company is to invest RUB 275 million in the regional gasification. The funds will be used to design and construct a gas lateral connecting the automatic gas distribution station of Petropavlovsk-Kamchatsky to CHP – 2.

In 2009 the Kamchatka Krai was for the first time involved into the Gazprom’s gasification program. Under the Program the Company is to invest RUB 275 million in the regional gasification. The funds will be used to design and construct a gas lateral connecting the automatic gas distribution station of Petropavlovsk-Kamchatsky to CHP – 2.

In February 2009, led by the Krai’s Governor and with the participation of Gazprom and Kamchatskenergo a meeting was held dedicated to the synchronized commissioning of gas transportation facilities and preparation of Kamchatka’s consumers to receive gas. Based on the meeting results a plan of coordinated actions was elaborated.

Gazprom and the Kamchatka Krai Government entered into the Accord on Gasification in January 2008, and into the Agreement of Cooperation in February 2009.

The gasification level in the Kamchatka Krai is below 1 per cent (LNG is not supplied). Natural gas in the amount of 9 million cubic meters is supplied to the settlements of Sobolevo and Ustievoye on the western coast of Kamchatka from the Kshukskoye gas and condensate field.

The regional gas production and transportation is effectuated by Kamchatgazprom (92.25 per cent state-owned). Gazprom is engaged in the acquisition of the company.

Based on the Russian Federation Government’s resolutions adopted at the Vladivostok visiting session of September 1, 2008 the Natural Resources Ministry and the Federal Agency for Subsoil Usage were delegated to resolve the issue of awarding Gazprom the right to use the subsurface resources of the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks of the Sakhalin III project and the Zapadno-Kamchatsky prospect located on the Okhotsk Sea shelf.