Tomsk hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Alexander Karlin, Governor of the Altai Krai.

During the meeting the parties addressed implementation of the Cooperation Agreement signed between Gazprom and the Krai Administration.

Special emphasis was placed on the regional gas supply issues. It was noted that in 2011 Gazprom would initiate construction of a gas lateral to the Nizhnaya Kayancha village. In addition, the parties discussed the prospects for the regional gas supply development stemming from the Company's plans to build the Altai gas trunkline.

The parties also discussed the Altai Krai gasification issues.

Background:

In 2004 Gazprom and the Altai Krai Administration signed the Cooperation Agreement that was extended in 2009. The Gasification Accord was inked in 2004.

Natural gas penetration in the Altai Krai is at 7.2 per cent including 11.4 per cent in cities and towns and 2.6 per cent in the rural area. The respective gasification levels throughout Russia average 63.2, 67.5, and 45.5 per cent.

From 2005 through 2009 Gazprom allocated RUB 1.6 billion for the Altai Krai gasification. The funds were used to construct 19 inter-settlement gas pipelines. In 2010 Gazprom allocated RUB 95 million for the regional gasification to finalize construction of an inter-settlement gas pipeline to the village of Larchikha.

From 2005 through 2010 the Altai Krai Administration sponsored gasification of 11,886 households and apartments, construction of 288 kilometers of street-level networks and conversion of 100 boiler houses to gas.

Within the Altai project, natural gas is to be delivered from Western Siberian fields to China across the western stretch of the Russian-Chinese border.