Led by Alexey Miller, Chairman of the Gazprom Management Committee, a meeting dedicated to increasing the security of gas supply to the Kaliningrad Region took place in the Company's headquarters.

It was pointed out that Gazprom was performing large-scale activities aimed at securing reliability and boosting gas supply to the consumers of Russia's western enclave. In 2009 the Company doubled the capacity of theMinsk – Vilnius – Kaunas – Kaliningrad gas pipeline to 2.5 billion cubic meters per year and expanded the Krasnoznamenskaya compressor station. This September Gazprom commissioned Phase 1 of the Kaliningradskoye UGS facility with the working gas capacity of 52 million cubic meters and maximum daily deliverability of 4.8 million cubic meters (average gas consumption in the Region is 5.9 million cubic meters).

The meeting considered and adopted the Action Plan for Securing Reliable Gas Supply to the Kaliningrad Region. The work is expected to be done in two main areas – creating an alternative route for natural gas delivery and expanding gas reserves of the existing UGS facility.

The possibility of delivering LNG by sea will substantially increase the energy security of the Kaliningrad Region, taking into account its peculiar geographic location. On the Baltic coast Gazprom will build an LNG regasification terminal, which will be linked with the existing gas pipeline near the Kaliningradskoye UGS facility, thus making it possible to supply gas to consumers in the Region and to feed it into the underground storage.

At present, several options are being considered for working out the location of the terminal with a daily output of at least 9 million cubic meters of gas. In 2014 the Investment Rationale for this project will be completed. It is planned that already in late 2017 the terminal will be able to receive first LNG. At the initial stage, the external market is considered as the LNG provider to be subsequently replaced by natural gas from the Baltic LNG project – Phase 1 is planned for commissioning in late 2018.

The accelerated development of the Kaliningrad UGS capacities in salt caverns will become another area of increasing the reliability of gas supply to the Region. The number of tanks is to be gradually increased from 2 to 14, which will make it possible to bring the UGS facility to its design capacity by 2025 – its working gas capacity will equal 800 million cubic meters. Gazprom will be expanding the UGS facility and creating the regasification terminal simultaneously.

“Gazprom is solving the issue of a national significance in the Kaliningrad Region. Nowadays, a transit gas pipeline running via other countries delivers gas to the Region, but when the regasification terminal is built and the existing UGS capacity is extended, the Kaliningrad energy security will be increased by many times. At least during two months the gas supply to the Region may be fully autonomous. It is particularly important that along with additional gas volumes there will be an environment for boosting the regional industry, creating new jobs and supporting an intensive socio-economic growth,” said Alexey Miller.

Background

In September 2013 Gazprom and the Kaliningrad Region Government signed the Agreement of Understanding and Cooperation in relation to the project aimed at building an LNG regasification terminal on the Baltic coast of the Kaliningrad Region. Pursuant to the document, the Regional Government will provide whatever assistance possible to Gazprom in obtaining the approvals required for the construction as well as in the land allocation issues.

The Baltic LNG project provides for the construction of an LNG plant with the annual capacity of up to 10 million tons in the Leningrad Region. The Investment Rationale for the project will be completed in the first half of 2014.