The Board of Directors approved Gazprom's efforts as part of the Power Generation Strategy.

The Management Committee received an order to arrange the analysis of foreign power markets including those located in Northeast Asia. It was highlighted that Gazprom Group's interest in the regional power sector was primarily conditioned by the prospects for expanding Russian gas supplies to this market and opportunities to ensure the synergy with the gas business through a direct involvement into the entire value chain: from gas supply to power generation and distribution.

Background

The Gazprom Power Generation Strategy was adopted by the Board of Directors in April 2007.

The Strategy implementation made Gazprom Group the largest power generating assets holder in Russia and one of top ten power generating companies worldwide. The aggregate installed capacity of Gazprom Group's power generating assets exceeds 37 GW.

In late 2009 Gazprom finally consolidated the Group's major power generating assets: Mosenergo , TGC-1 , WGC-2 and WGC-6 on the balance of Gazprom energoholding (100 per cent subsidiary of Gazprom). In this way, an efficient management structure complying with the common corporate standards was established.

Gazprom Group is the largest investor in the Russian power generating sector. The Company delivers investment projects under the obligations assumed while acquiring the power generating assets. From 2007 to 2016 it is projected to commission 9 GW of new capacities as part of the Capacity Supply Agreement (CSA). Between 2007 and September 2011 Gazprom completed the construction and upgrade projects totaling in nearly 3 GW of new capacities and is going to additionally commission some 1 GW of new capacities under the CSA before the year end. Along with the CSA activities, Gazprom put onstream the second power generating unit (450 MW) at Kaliningrad CHPP-2 in 2010.

At present, Gazprom energoholding is performing the merger of WGC-2 and WGC-6 generating companies. This will result in creating Russia's largest heat generating company with installed capacity of approximately 17.9 GW.

Gazprom Group is currently analyzing European power markets to find the ways to launch promising projects there.

Meeting the objectives set out in the Gazprom Power Generation Strategy will help retain the Company's leadership in the power industry, boost its competitive ability and secure additional revenues from the core business.