As part of the working visit by Gazprom's delegation to Salekhard, Alexey Miller, Chairman of the Company's Management Committee met today with Dmitry Kobylkin, Governor of the Yamal-Nenets Autonomous Okrug (YaNAO).

The meeting highlighted that the Yamal-Nenets Autonomous Okrug was a strategic partner of Gazprom. In the region, the Company produces over 90 per cent of natural gas and implements the Yamal megaproject, which is crucial for boosting gas production in Russia.

“This very region supplies the bulk of gas that meets Russian consumers' demand and fulfills our export contracts. In the future, Gazprom will start the commercial deliveries of Yamal gas to new markets, including Asia, that will attain the profitability level at least equal to the profitability of the current export markets,” said Alexey Miller.

The scope of Gazprom's activity in the Okrug influences the Company's investments in the YaNAO: between 2006 and 2011 the amount of investments exceeded RUB 1.2 trillion. This year, the bulk of financing was allocated for the Yamal megaproject implementation: development of the Bovanenkovo field, construction of the Bovanenkovo – Ukhta gas trunkline system and the new Obskaya – Bovanenkovo railroad. Besides, the Company keeps retrofitting the Medvezhye, Zapolyarnoye, Urengoyskoye and Yamburgskoye oil, gas and condensate fields.

The parties discussed the cooperation between Gazprom and the YaNAO in 2012 emphasizing Gazprom's participation in economic development of the region, creation of the social infrastructure and facilitation of employment among the local population. It was highlighted that the amount of tax proceeds from the activities of Gazprom and its subsidiaries operating in the YaNAO increased every year. Thus, in 2010 this figure amounted to RUB 35 billion, while between January and October, 2011 it already exceeded RUB 44 billion. Subsequently, once the Bovanenkovo field reaches its nominal capacity, the volume of tax proceeds will surpass RUB 70 billion.

Alexey Miller and Dmitry Kobylkin signed the Agreement of Cooperation between Gazprom and the YaNAO for 2012.

The cooperation priorities defined by the document are as follows: development of hydrocarbon fields on the Yamal Peninsula, gasification of the Okrug, execution of energy saving and energy efficiency improvement programs.

The important components of the cooperation still include introduction of green technologies at heat supply facilities, conversion of gas-fired boiler houses to combined heat and power generation, utilization of low-pressure gas and associated petroleum gas as fuels for new power stations, wider use of natural gas as a motor fuel.

The YaNAO Government will duly facilitate adoption of regional tax exemptions for the companies engaged in hydrocarbons production, transmission and processing as well as gasification, energy saving and environmental protection. Gazprom will be assisted in registration of land plots for construction of industrial and social facilities.

Gazprom and its subsidiaries will secure reliable supplies of natural gas and refined products to regional consumers. The Agreement also outlines Gazprom's liabilities in the social policy, nature management, capital construction, transport and some other sectors.

According to the document, Gazprom will give the employment priority to the local qualified personnel including representatives of indigenous minorities, who are specially educated in the professions and jobs demanded by the Company.

Background

The Yamal-Nenets Autonomous Okrug (YaNAO) is a region of Gazprom's strategic interests.

The principal document regulating cooperation between Gazprom and the YaNAO is the General Agreement. In furtherance of the document the parties annually enter into Agreements of Cooperation. They have also signed a Memorandum of Cooperation, accords on gasification and cooperation in the natural resources exploitation area.

From 2007 to 2010 Gazprom invested RUB 429.4 million in the YaNAO gasification. The funds were used to design and construct five gas laterals with the total length of 30.6 kilometers. Four laterals with the total length of 29.8 kilometers have been built so far. This year, Gazprom has allocated RUB 58 million for the YaNAO gasification to continue the construction of one gas lateral.

As part of the Gazprom to Children program, the Company has built two sports and health centers (in Nadym and Novy Urengoy), an indoor ice arena (in the Pangody settlement), a versatile sports complex (in Nadym) and other facilities.