Gazprom’s Management Committee yesterday reviewed preliminary results of the 2004 Investment Program implementation and resolved to approve the 2005 Draft investment program and submit it for the Board of Directors’ consideration.

Projected investments for 2005 are identified at RUR 300 billion, including RUR 150 billion to be earmarked as capital investments and RUR 150 billion, as long-term financial investments.

The 2005 Draft social and economic development plan prescribes 547 bcm of gas to be produced. Under the document, Gazprom’s 2005 earnings and net profit are scheduled at RUR 1.3 trillion and RUR 160 billion, respectively.

Forecasted parameters of Gazprom’s 2005, 2006 and 2007 budgets stipulate:

• RUR 300 billion, RUR 286.5 billion and RUR 298.8 billion, respectively, being allocated as investments;
• RUR 110 billion, RUR 90 billion and RUR 90 billion, respectively, being taken as financial borrowings.

Simultaneously, the Management Committee heard the report on Gazprom’s gas production and transmission subsidiaries’ preliminary operating highlights, 2004 budgets execution and 2005 draft investment programs.

At the same time, the Management Committee took into account information on Gazprom’s gas production and transmission subsidiaries’ social and economic development plan parameters and draft balance sheets for 2005.

Reference:

When drafting Gazprom’s 2005 Investment Program, the leadership took into account the most promising investment projects in the following sectors:

• gas production (the Zapolyarnoye, Pestsovoye, Yamburgskoye, Bovanenkovskoye, Kharasaveyskoye and other fields operation);
• gas transmission facilities construction and upgrading (the NTR-Torzhok, Yamal-Europe and Zapolyarnoye-Urengoy gas pipelines, Urengoy gas transmission network expansion);
• underground gas storage facilities construction.

A total of 1,217.06 km of gas mains and branches, 15 gas pipeline compressor stations, 2 UGS facility-based compressor stations, 2 booster stations, 237 gas wells and 24 UGS facility-based wells is planned to be brought into operation over 2005.

Accounting for over 67% of overall amount, gas transmission projects are a top priority in Gazprom’s capital investment targets.

The Investment Program is also aimed at the implementation of the following major promising projects:

• Undertaking comprehensive field development in Eastern Siberia and the Far East;
• Constructing the North-European gas pipeline;
• Increasing the Ukrainian gas transmission network throughput at the Bogorodchany-Uzhgorod section;
• Expanding the Central Asia – Center gas transmission system in Uzbekistan, Kazakhstan and Turkmenistan;
• Acquiring assets.

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