The 6-th Baikal Economic Forum opened today in Irkutsk. Taking part in the forum is a Gazprom delegation headed by Alexander Ananenkov, Deputy Chairman of the Management Committee.

Addressing the plenary session ‘Siberia – The Land of Opportunities. Irkutsk – The Centerpiece’, Alexander Ananenkov noted that the main goal of the Eastern Gas Program was to form an efficient gas industry in Eastern Russia and to create conditions on its basis for rapid socioeconomic development of the region.

“At the same time, natural gas in Eastern Siberia and the Far East has a far more important mission than just gasification. Firstly, being one of the most eco-friendly and technologically perfect fuels, natural gas will provide significant support for meeting the modernization and innovative development challenge in the region.

Secondly, a potent gas processing, gas chemical and helium industry will be created in Eastern Russia based on the local resource base and with the use of state-of-the-art technologies. Moreover, Gazprom’s purchase orders will set the stage for retrofitting the shipbuilding industry, manufacturing wellhead and shut-off valves, construction machinery and other engineering products,” said Alexander Ananenkov.

“Gazprom takes concrete actions to implement the Eastern Gas Program. The Company conducts geological exploration in the Krasnoyarsk Krai, Irkutsk Oblast, Yakutia, the Sakhalin and Kamchatka shelf to form its own resource base. Phase 1 of the gas supply project for the Kamchatka Krai is nearing completion, construction is underway on the Sakhalin – Khabarovsk – Vladivostok gas transmission system, the Yakutia gas production center is in the formation process and the Chayanda field is being prepared for development.

Gas supply to and gasification of eastern Russia is a top priority of the Eastern Gas Program. “The gas penetration level in these regions is currently insufficient. According to Gazprom’s experts, gas demand in eastern Russia will show rapid growth and along with the gas industry development may reach some 40 billion cubic meters a year by 2020,” stressed Alexander Ananenkov.

He pointed out that Gazprom had already developed general gas supply schemes and signed gasification accords with most constituent entities of the Siberian and Far Eastern Federal Districts. In 2004‑2009 Gazprom invested RUB 6.9 billion in gasification of the Siberian Federal District alone.

Taking into account the specific characteristics of eastern regions, Gazprom intends to construct not only pipelines here, but autonomous LPG and LNG supply systems as well. In this regard, the general gas supply schemes contemplate LPG deliveries to the Republics of Tyva and Khakasia.

Alexander Ananenkov wound up his speech by pointing out that it was necessary to set the balance of interests between investors and potential consumers when setting the gas price as part of the Eastern Russia gasification task.

“Gasification of energy-excessive regions in Eastern Siberia and the Far East is carried out under cardinally different conditions as compared to shortage-experiencing western regions of Russia. One of the principles set out in the Eastern Gas Program is to form the Russian natural gas market based on prices that take into account gas supply and demand as well as its competition with coal and fuel oil. But at present the competitive advantages of gas are practically ignored.

It is expedient to motivate gas consumers to upgrade the existing and install new state-of-the-art, innovative and energy-saving equipment. Thus we will make a real step toward environmental enhancement and better living standards of the population particularly in large cities and industrial centers of Eastern Russia,” said Alexander Ananenkov.

Background:

The Baikal Economic Forum has been held in Irkutsk since 2000. The Forum organizers are the Federation Council of the Russian Federation, Irkutsk Oblast Administration, Economic Development Ministry of the Russian Federation, Regional Development Ministry of the Russian Federation.

Gazprom is the general partner of the Forum.

The Forum is attended by representatives of the Russian federal authorities, regional and local heads, leaders of public organizations, associations, movements, unions of industrialists and entrepreneurs, business circles as well as by scientists, specialists and public persons from Russia and other countries.

The main goal of the Forum is to assist in implementing the development strategy for Russia’s eastern regions.

The 6th Baikal Economic Forum will be held through September 9.

The September 2007 Order by the Russian Federation Industry and Energy Ministry approved the Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program). Gazprom was appointed by the Russian Government as the Program execution coordinator.