Gazprom’s Headquarters today hosted a working meeting between Alexey Miller, Gazprom’s Management Committee Chairman and

Viktor Ishayev, Chairman of the Khabarovsk Area’s Government.

The parties discussed implementation of the Cooperation Agreement between Gazprom and the Khabarovsk Area.

The meeting paid special attention to the issues of Gazprom's participation in the construction of the Sakhalin - Komsomolsk-on-Amur - Khabarovsk natural gas pipeline. Alexey Miller underlined the importance of this project for forming the gas market in eastern Russia.

The parties emphasized that the pipeline construction linking Sakhalin and the mainland is the first stage in implementing the state-run Program on setting up a unified system of production, transportation and supply of natural gas in Eastern Siberia and the Russian Far East. The Program is currently being finalized by corresponding Federal Ministries and Gazprom. The gas pipeline will provide an impetus for economic development of eastern Russia.

Alexey Miller and Viktor Ishayev discussed Gazprom's role in organizing gas supplies to the Khabarovsk Area. The parties agreed that the approach to this issue should be an integrated one from the point of view of Gazprom's participation in forming and developing the gas market in eastern Russia.

Alexey Miller and Viktor Ishayev discussed Gazprom's initiative to abolish the gas pricing regulation for industrial consumers, starting from 2006, and shifting to commodity trading practice. As it was noted during the meeting, this approach to natural gas pricing had already been approved as one of the main principles of eastern Russia’s gas industry development.

Reference:

The five-year Cooperation Agreement between Gazprom and the Khabarovsk Area was signed on 22 April. The Agreement stipulates the following joint activities:

• intensification of gas consumption in cities and towns, districts and rural areas;
• preparation and realization of projects in exploration and development;
• creation of the necessary conditions in financial, investment and tax areas aimed at improving the fuel and energy industry efficiency;
• development of capacities utilizing compressed natural gas and LNG as motor fuels, and other joint activities.

At present, Gazprom is not supplying natural gas to the Khabarovsk Area’s consumers.

The natural and liquefied gas supply infrastructure of the Khabarovsk Area is developed by 11%, in cities, 73%, in towns and urban settlements and 68%, in rural area.

The Komsomolsk-on-Amur - Khabarovsk pipeline will be the extension of the existing Sakhalin - Komsomolsk-on-Amur pipeline which is operated by Rosneft-Sakhalinmorneftegaz. The pipeline construction is carried out in accordance with the Federal Program on gas deliveries to the Sakhalin Region, Khabarovsk and Primorsk Areas, approved by the Russian Government in 1999. The construction commenced in 2001. The pipeline length will be 502 km. By 1 March 2005, some 300 km of the pipeline were constructed. The operation of the pipeline will commence in the third quarter of 2006, which coincides with the Sakhalin-1 project's planned commercial gas supplies. Daltransgaz is the general contractor for the pipeline construction. The company was incorporated in 2000 by Rosneft, Rosneft-Sakhalinmorneftegaz, the Property Ministry of the Russian Federation, the Khabarovsk Area’s Government and the authorities of the Sakhalin Region and Primorsk Area.

In November 2004, Gazprom's experts visited the Khabarovsk Area and Sakhalin Region and the site of the Sakhalin - Komsomolsk-on-Amur - Khabarovsk trunk pipeline construction where they studied the existing gas transportation system and the construction progress, technologies and management.

DIVISION OF RELATIONS WITH MASS MEDIA