Today, Alexey Miller, Chairman of the Gazprom Management Committee and Vladimir Torlopov, Head of the Republic of Komi signed in Ukhta an Agreement of Cooperation. The Agreement is effective during 2009-2012, the period of the Bovanenkovo – Ukhta gas trunkline system construction.

In line with the Agreement the parties admit the necessity of a comprehensive approach to developing gas supply to the Republic of Komi, with due regard of the Bovanenkovo – Ukhta gas trunkline system construction, the existing gas transportation infrastructure reliability increase and population centers gasification.

Under the Agreement, Gazprom will perform engineering and construction of a gas lateral from the Bovanenkovo – Ukhta gas trunkline system to the location of the Sosnogorsk Alumina Plant and will secure natural gas supply to the Plant in 2012.

The engineering and construction of the gas laterals and gas distribution stations in the region will be synchronized with the development of the gas distribution networks according to the General Scheme for gas supply to and gasification of the Republic of Komi.

Gazprom will also implement environmental activities set out in the project for the Bovanenkovo – Ukhta gas trunkline system construction.

The Government of the Republic of Komi will perform the work aimed at allocating land plots to Gazprom and its subsidiaries for the Bovanenkovo – Ukhta gas trunkline system construction, as well as for the production & technical and social infrastructure.

Gazprom and the Government of the Republic of Komi will jointly develop a program of switching municipal vehicles to CNG.

Additionally, the parties will participate in the execution of joint social programs in the areas of facilities construction intended for gas transportation from the Yamal Peninsula.

Background:

The Cooperation Agreement and the Gasification Accord between Gazprom and the Republic of Komi were signed in 2005 and 2008 respectively.

In 2007 Gazprom supplied the Republic of Komi with 3.2 bcm of natural gas, and approximately the same volume is slated for this year.

The Republican consumers have no arrears to Gazprom for the supplied gas. As of November 1, 2008 advanced payments accounted for some RUB 225 mln.

Natural gas penetration in the Republic of Komi is at 42.6 per cent, including 56 per cent in cities and towns, and 5.7 per cent in the rural area. The identical figures throughout Russia average 62, 67 and 44 per cent respectively.

Under the 2008 Gasification Program for the Russian Federation Regions Gazprom allocated RUB 220 mln to the Republic for the engineering and construction of five gasification facilities. This year a 15-km-long inter-settlement gas pipeline has been commissioned in the Republic and preparation works have been performed for the facilities planned for construction in 2009.