Today, at Gazprom’s Headquarters, Alexey Miller, the Company’s Management Committee Chairman and Valentina Matviyenko, St. Petersburg’s Governor entered into a Cooperation Agreement over 2005.

In pursuance of the Agreement, Gazprom will supply St. Petersburg’s consumers with 10.8 bcm of gas in 2005 and will allot funds for the intensification of gas consumption in the Kurort and Pushkin districts.

St. Petersburg’s Government, on its part, will provide timely and full payments for prospective gas deliveries to budget-financed bodies, specially allocating finance to clear their gas arrears and exercising control over the budget execution. Gazprom’s subsidiaries engaged in the gas supply infrastructure designing, construction and operation will be assisted in receiving loan and tax benefits.

At the same time, the Government is committed to stepping up measures intended to fully offset Gazprom’s losses arising when gas is channeled to privileged customers, with gas retail prices, tariffs on gas transmission via distribution networks and supply & marketing services to be timely revised and approved.

The Agreement also stipulates long-term lending of the Petrograd and Kurort districts-based heat and power generation facilities to Peterburgteploenergo, with funds intended to construct new and upgrade existing facilities to be earmarked in Mezhregiongaz’s social and economic development plan.

In addition, St. Petersburg’s authorities took the commitment to set economically underpinned tariffs for Peterburgteploenergo’s heating power, yielding at least 12% return on heat and power infrastructure reconstruction projects.

Simultaneously, the Agreement emphasizes updating and endorsing design estimates for the ramified Kolpino-2 gas distribution station construction.

Gazprom’s subsidiaries will be granted assistance in receiving land plots for the construction of residential and non-residential premises.

In accordance with the Agreement, Gazprom will also earmark finance to build an artificially frozen open-air rink for children in the Tavrichesky Garden.

In signing the Agreement, Alexey Miller and Valentina Matviyenko underscored that the new document was another indication of mutually beneficial, long-term prospect-oriented and strategic cooperation between Gazprom and St. Petersburg.

Reference:

Gazprom and St. Petersburg’s Government entered into a 5-year Cooperation Agreement for 2003 on 25 January 2003.

The 2004 Cooperation Agreement challenges were met in full.

Under the 2004 Program on gas deliveries to the RF regions, Gazprom channeled some RUR 142 million to intensify gas consumption in St. Petersburg’s districts.

St. Petersburg’s natural gas supply infrastructure is developed by 65%, as compared to the Russia-average parameter of 51.7%.

In 2003, Gazprom provided 10.8 bcm of gas to St. Petersburg’s consumers, with roughly the same amount slated for 2004.

St. Petersburg’s consumers’ 2004 gas payments account for 98.5%.

A Mezhregionteploenergo 100% subsidiary, Peterburgteploenergo is owned by the former company’s regional gas trading business units Mezhregiongaz and Regiongazholding (59% and 41% of shares, respectively). Peterburgteploenergo was founded in April 2004 to upgrade and manage St. Petersburg’s heat and power supply network.

Upgrading heat and power generation facilities of the Petrograd district includes repairs or replacement of 114 boilers and some 190 km of heating mains. This year, Peterburgteploenergo has developed and implemented a pilot project on upgrading 2 blocks in the Petrograd district.

DIVISION OF RELATIONS WITH MASS MEDIA