St. Petersburg today has hosted the opening of the XI International Specialized Exhibition of Natural Gas Industry and Technology for Gas Equipment “Ros–Gas–Expo–2007” and the Conference “Build-up of Gas Distribution Business Performance”.

In delivering his report “Gas Distribution: Yesterday, Today and Tomorrow” Bogdan Budzulyak, Head of the Gazprom Gas Transportation, Underground Storage and Utilization Department noted that the gas distribution asset privatization process launched in 1993 had disrupted a system of vertical gas distribution management, pricing and tariff policy, unified technical policy. In that situation Gazprom made a decision to consolidate gas distribution assets, establish a managing gas distribution company and participate in the gasification of Russian regions.

As a result the year 2000 saw the setting up of Regiongazholding succeeded in 2004 by Gazpromregiongaz. The speaker reported that currently Gazprom Group comprised 172 gas distribution companies. “For the first time ever operations of gas transportation, distribution and regional companies have been structured within an integrated technological gas supply complex. The existing system is expected to align and streamline the work aiming to develop and maintain safe and sound the systems supplying gas to Russian consumers”, - underscored Bogdan Budzulyak.

The reporter emphasized that at present Gazprom’s major businesses in the gas distribution area were as follows: gasification of Russia’s regions, structuring of company operations within the integrated technological gas supply complex “transportation – gas distribution”, harmonization of legal and legislative provisions, etc. In 2008 Gazprom plans to devise a Technical Enhancement Concept for Gas Distribution Systems and a Comprehensive Upgrading and Technical Re-Equipment Program for the Company Gas Facilities between 2009 and 2012. The Company will proceed with implementing the large-scale task of developing the gas supply system in eastern Russia. Moreover, it is projected to develop pilot projects for high energy efficiency areas and a set of Gazprom standards for the introduction of up-to-date gas pipeline upgrading technologies.

“The above mentioned activities are a platform for Gazprom Group’s gas distribution systems and companies over the next 5-7 years”, - concluded Bogdan Budzulyak.

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The XI International Specialized Exhibition of Natural Gas Industry and Technology for Gas Equipment “Ros–Gas–Expo–2007” and Conference “Build-up of Gas Distribution Business Performance” are organized by Gazprom, Gazpromregiongaz, Economic Cooperation Association for the Russian Federation Northwest Region Constituents and Farexpo Exhibition Company.

The Exhibition displays advanced technologies and equipment deployed in the gas distribution and utilization sector, and supports innovation approaches largely contributing thus to future evolution of Russia’s gas distribution sub-industry.

In 2007 the Exhibition has gathered together 180 exhibiting companies from Russia, Italy, Spain, China, Slovakia, Turkey, France, South Korea, Japan, Belarus, Latvia and Ukraine.

At present Gazprom Group’s gas distribution companies operate 514.2 thousand km of gas distribution networks (about 80 per cent of the Russian total). The annual volume of gas distribution by these networks amounts to some 222 bcm.

In 2004 the Gazprom Management Committee approved the Comprehensive Upgrading and Re-Equipment Program for the Company Gas Facilities between 2004 and 2008.

The Regional Gasification Program for Russia during 2005 – 2007 earmarks RUR 43 bln of Gazprom’s investment. Furthermore, in 2006 Gazprom committed RUR 1.1 bln to upgrade existing low pressure networks.

“The Regional Gasification Program for Russia during 2005 – 2007 will secure an increase in the average level of Russia’s gasification with natural gas from 53 to 62 per cent, with 13 mln Russia’s citizens to be serviced.