Today, in Moscow, Gazprom’s Headquarters hosted a working meeting between Alexey Miller, Gazprom’s Management Committee Chairman and Eduard Rossel, Governor of the Sverdlovsk region.

The meeting debated the development of a new cooperation agreement between Gazprom and the Sverdlovsk region and came to an accord to sign it shortly.

A. Miller and E. Rossel also addressed potential implementation of joint projects on re-equipping regional automobile transport and railroad vehicles with gas-fuelled engines.

At the same time, the parties discussed the prospect of fully realizing the regional companies’ potential in replacing Gazprom and its subsidiaries’ machine-building equipment imports.

Simultaneously, Alexey Miller and Eduard Rossel deliberated on matters concerning the construction of a large diameter pipe plant (LDPP). As it was particularly pointed out, the price and supply terms and conditions of the LDPP’s output should be formulated based on market principles, taking into account Gazprom’s investment projects and programs.

Ultimately, the meeting addressed the need to fully settle until the year-end the Sverdlovsk region’s consumers’ gas debt.

Reference:

Gazprom and the Government of the Sverdlovsk region entered into a Cooperation Agreement on 30 January 1997. The Agreement expired in 2002.

Tyumentransgaz and Uraltransgaz are operators of the Sverdlovsk region’s gas supply network. The length of regional gas mains and branches averages 7.7 thousand km, including 1.1 thousand km of gas branches.

As of 1 January 2004, the natural gas supply network of the Sverdlovsk region was developed at 55% of maximum gas demand, with Russia’s same average parameter accounting for 52.7%.

In December 2003, the Sverdlovsk region’s authorities issued a Directive on paramount measures aiming to re-equip motor vehicles with compressed natural gas-fuelled engines. Under the Directive, Uraltransgaz was put in charge of re-equipping motor vehicles (some 15 thousand units) with gas-driven engines, producing mobile fuelling stations and constructing automobile gas-fuelling compressor stations in the region.

Starting 1 January 1999, gas has been delivered to the Sverdlovsk region by independent gas producers. As of 1 January 2004, the regional consumers’ debt for Gazprom’s previous gas supplies dropped over 2001 to 2003 from RUR 3.5 billion down to RUR 249 million.

Under the RF Government’s resolution, Gazprom served in October 2000 as co-promoter of the Large Diameter Pipe Plant (LDPP). In accordance with the LDPP’s incorporation documents, Gazprom owns a 19.9% stake of the Plant.

On 30 April 2004, Gazprom’s Board of Directors ratified the Provision on the regulations governing preferentially contest-based awards of contracts on supplies of goods, fulfillment of works and rendering of services for the Gazprom Group’s needs.

The Provision aimes at enhancing the contract awards efficiency, contributing to the competition growth, ensuring impartiality while selecting suppliers and achieving procurement openness.

While in the 2nd half of 2004 Gazprom’s open-tender procurement is scheduled to account for 20% of overall corporate purchases, in 2005 and 2006, this figure is expected to grow to 50 and 80%, respectively.

DIVISION OF RELATIONS WITH MASS MEDIA