An ordinary meeting of the Gazprom’s Committee on Regional Policy was held yesterday. Th session was presided by Alexander Ryazanov, the Deputy Chairman of the Management Committee.

The members of the Committee discussed and approved the pre-set limits of natural gas supply to the Russian Federation territories and the major gas consumers for the year of 2004.

It was noted that gas supply policy was based on the state of payments for natural gas delivered and indebtedness for the preceding years’ gas deliveries. Moreover, the growing demand of municipal and state-financed gas consumers was taken into consideration. One of the main topics discussed was devoted to the planned and actual gas consumption in the current year as well as the technical feasibility of gas deliveries to the regions.

As compared to 2003, gas delivery to the industrial sector in 2004 will be increased by as high as: the cement industry, 4.5%; the fertilizers production, 5.8%; the metallurgy,1.5%. Gas supply to the power generation was set at the level adopted for the previous year – 2003.

The growth of industrial gas consumption is expected to be secured by independent producers’ share in the 2004 total gas delivery pattern.

As was specially stressed, none of the Russian Federation regions will be lacking natural gas supply. Gas supply growth has been set for actually all of the RF regions, except of certain municipalities of the Southern Federal districts exposed as non-due payers.

In addition, the Session participants discussed preliminary results of the RF Regional Gas Supply Network Development Program realization in 2003 and the Program framework for the year of 2004.

According to the Program, gas distribution network construction is under way in 34 districts of the Russian Federation. The total amount of capital investment equals RR 3.5 billion. 247 gas consumption facilities will be commissioned by the end of 2003.

In the meantime, the members of the Committee noted inactivity of certain RF local authorities to follow the contractual obligations that will slow down the regional gas supply system development (behind schedule).

It was also noted, that the draft program on the RF regional gas supply grid development Program for 2004 is in line with the core issues of the Corporate concept of Gazprom’s involvement in the Program.

The Committee recommended that OAO Regiongazholding and other corporate subdivisions of Gazprom would consider a strict requirement to complete construction of the gas supply grid facilities initiated in the preceding period on the account of Gazprom as well as a possibility to acquire gas grids constructed on the account of other financial sources and as a repayment on the part of local budget funds for the gas delivered, while implementing the Program of gas supply network development.

The Committee approved ? draft program for construction of Gazprom's social sphere facilities in the RF territories paying special attention to allocation of funds into transfer of the facilities completed in 2004 to municipal ownership.

DIVISION OF RELATIONS WITH MASS MEDIA