The Board of Directorsí meeting has come to an end at Gazpromís Headquarters.
The Board of Directors heard a report on the progress in the confirmation of Gazpromís ownership rights for the immovable property included in the Combined Plan on privatization of the United Gas Transmission System facilities and other corporate assets. The Board of Directors ordered the Management Committee to organize work on state registration of Gazpromís rights for its real estate assets.
The Board of Directors also coordinated the appointment of Mikhail Sereda as Deputy Chairman of Gazpromís Management Committee while retaining his position of the Head of Gazpromís Administration.
At the same time, the Board of Directors resolved to delay the reviewal of the issue on shifting over to an investment stage of activities by the International Consortium for the Ukrainian Gas Transmission Network Operation and Development until a Board of Directorsí meeting to be conducted in absentia.
In addition, the Board of Directors decided to partially alter its resolution, dated 23 July 2004, to set up the Mezhregiongazholding company, namely to change said companyís business name to Gazpromregiongaz.
The business name change points to the acknowledged gas distribution sector significance of Gazprom as a vertically integrated company. Virtually, this is the 1st time a Gazprom subsidiary changes its business name within the Companyís 2nd phase of restructuring.
The decision to consolidate Gazpromís gas distribution assets within one company was adopted by the Board of Directors on 23 July 2004. Mezhregiongaz and Lentransgaz, 100% Gazpromís subsidiaries, will serve as shareholders of the new company, taking control over 99% and 1% of shares, respectively. The shares will be paid for by gas distribution network facilities, in cash as well as in exchange for shares and other securities of gas distribution companies.
The new business is being set up in the course of Gazpromís 2nd phase of intra-corporate restructuring aimed at enhancing Gazpromís business efficiency as a vertically integrated company and optimizing the core business management structure at the subsidiariesí level. The reforms stipulate the corporate units dealing with various businesses (including gas transmission via distribution networks) being set up as independent structures.
Gazpromís gas distribution asset consolidation will ensure improvement of the gas distribution system in the RF regions, will establish pre-requisites for the implementation of a common tariff policy and attraction of finance to be channeled to intensify gas consumption throughout the Russian Federation. In addition, said intentions will create conditions for the gas market liberalization by providing all the existing gas producers with access to consumers on equal terms and will secure operation of gas distribution networks, taking into account common standards and requirements.
Over the past years, the Gazprom Group became proprietor of a large number of facilities and assets of gas distribution companies due to active involvement in the RF regional gas supply network development as well as to the fact that most gas distribution companies handed over their shares to the Gazprom Group as settlement of accrued debts.
Dispersal of gas distribution asset and share ownership between various companies of the Gazprom Group prevents the Company from efficiently managing said assets given the absense of an integrated coordination center.
Setting up a business consolidating the Gazprom Groupís gas distribution assets will contribute to effecting reliable and uninterrupted gas supplies to end consumers as well to:
- establishing environment for safe operation of gas distribution networks, taking into account common standards, regulations and requirements;
- implementing a common policy in the gas distribution technical development;
- creating pre-requisites for the implementation of a common tariff policy;
- promoting consolidation of gas distribution companies;
- raising finance for the intensification of gas consumption in the RF regions and re-construction of medium- and low-pressure networks;
- establishing environment for the domestic gas market restructuring by providing all the existing gas producers with access to consumers on equal terms.
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