On October 9–10 the Company’s group of experts led by Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee visited a number of construction facilities at the first start-up complex of the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS) in Sakhalin and the Primorsky Krai as part of a regular business trip to the Far East.

Today in Vladivostok Alexander Ananenkov chaired the meeting dedicated to the GTS construction.

Taking part in the meeting were heads and experts from Gazprom’s specialized subdivisions and subsidiaries: Gazprom invest Vostok, Gazprom mezhregiongaz, Gazprom transgaz Tomsk, Gazprom dobycha Noyabrsk, Gazprom komplektatsiya, Gazprom promgaz, Gazprom gaznadzor and contracting agencies.

It was noted that 956 kilometers of the GTS linear part had been welded, which makes up 71 per cent of the first start-up complex length. Simultaneous construction operations are underway at 12 sites of the Sakhalin Oblast, the Khabarovsk and Primorsky Krais. In addition, the meeting highlighted the need to maintain a high work pace in order to timely complete the facility construction, as well as pipes and equipment delivery.

The meeting participants considered the issues related to constructing a main compressor station on the Sakhalin Island and placing medium-pressure gas pipelines including a gas pipeline from Vladivostok to the Russky Island.

Attention was also paid to the resource base development in order to fully meet the gas demand in Russia’s Far East.

Gazprom’s specialized subdivisions, subsidiaries and contracting agencies were given appropriate tasks.

Background:

Gazprom’s expert groups take regular trips to the Far East. A group is made up of top managers from the Company, its specialized subdivisions, subsidiaries and contracting agencies. The trips are primarily aimed at securing timely execution of the projects for shaping the Unified Gas Supply System in Eastern Russia on the basis of the Company’s resource base.

In September 2007 the Russian Federation Industry and Energy Ministry’s Order 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 Federation Government as the Program execution coordinator.

The Eastern Gas Program gives priority to the creation and development of the Sakhalin – Khabarovsk – Vladivostok gas transmission system (GTS) that will be connected to a gas pipeline from the Republic of Sakha (Yakutia).

Launched in July 2009, the GTS construction is targeted at developing gas supplies to the Khabarovsk Krai and the Sakhalin Oblast, as well as arranging gas deliveries to the Primorsky Krai. The first GTS start-up complex is to be brought onstream in the third quarter of 2011. The 1,350-kilometer first start-up complex of the gas pipeline will have the annual capacity of 6 billion cubic meters. In parallel, the work is being done to gasify the Sakhalin Oblast and, inter alia, to convert CHPP-1 in Yuzhno-Sakhalinsk to natural gas.

The Sakhalin Island shelf and the Yakutian fields will be the main resource base for the Sakhalin – Khabarovsk – Vladivostok GTS development.