Gazprom’s Management Committee approved today the Conception of the Gazprom Group’s asset consolidation in the gas distribution sector.

Gas distribution assets are being consolidated within the 2nd phase of Gazprom’s restructuring that prescribes optimization of the subsidiaries’ core business management structure.

The Conception presumes setting up an independent Mezhregiongazholding gas distribution company to be initially owned by Mezhregiongaz (a 99% stake) and by Lentransgaz (a 1% stake). Under the Document, Mezhregiongazholding will take general control over gas distribution networks currently possessed by Gazprom, its gas transmission subsidiaries and Regiongazholding.

The main incorporation objectives of the Mezhregiongazholding company are as follows: enhancing the RF gas distribution system efficiency, setting prerequisites for the implementation of a common gas tariff policy, raising finance for the gas consumption intensification in the RF regions, establishing an environment for the internal gas market liberalization by providing all gas producers with common working conditions and creating an environment for the gas distribution systems secure operation, taking into account common standards and exigencies.

The Management Committee commissioned Gazprom’s relevant units to produce materials necessary for the issue of the Mezhregiongazholding incorporation to be submitted for the Board of Directors’ consideration.

Reference:

At present, Gazprom has virtually established a new gas distribution sub-industry. The Company’s affiliated undertakings are exercising control over 206 gas distribution entities operating 75% (403 thousand km) of Russia’s gas distribution pipelines and providing deliveries of 58% (some 158 bcm) of the total gas consumed to 75% of the country’s municipalities. At the same time, Gazprom is piping gas to 56% of Russia’s apartment buildings and 72% of industrial companies.

DIVISION OF RELATIONS WITH MASS MEDIA