Today in the city of Saint-Petersburg, Alexey Miller, Chairman of the Gazprom Management Committee and Valery Serdukov, Governor of the Leningrad Oblast have signed an Agreement of cooperation between Gazprom and the Leningrad Oblast Government in 2008.

Pursuant to the document the parties will continue comprehensive development of the Leningrad Oblast gas supply system due to the Nord Stream project execution.

The parties will work through economic, organizational and legislative issues to provide efficient gas utilization in the household sector by the systematic reconstruction and upgrading of fuel and energy equipment. Additionally, the parties will work out issue related to development of the comprehensive energy supply systems for industrial consumers based on utilization of modern highly-efficient gas saving technologies and equipment.

The Government of the Leningrad Oblast will provide full payment of the current gas deliveries to budget consumers, preparation of consumers for gas intake in pursuance of the synchronized gasification facilities construction schedule for 2008 signed including gas metering equipment installation. The Government will install economically proven gas consumption volumes for consumers who do not have gas metering equipment. 

The Government will develop and approve the schedule of switching to backup fuel supply in the Leningrad Oblast during cold weather and the implementation rules. Gazprom and its subsidiaries will be assisted in right-of-way related issues resolving.

Gazprom will provide uninterrupted gas supply to the Leningrad Oblast. The Company will earmark financial resources for the design and exploration works, construction end-up of formerly set up and start-up of new gasification facilities construction in the Leningrad Oblast due to the regional Government proposals in the draft gasification program for the Russian Federation regions for 2008.

Additionally, in 2008 Gazprom will plan the allocation of financial resources to execute power industry investment projects in the Leningrad Oblast.

Reference:

A five-year Agreement of cooperation between Gazprom and the Leningrad Oblast Government was signed on April 25, 2003.

Gazprom supplied more than 4 bcm of gas to the Leningrad Oblast in 2006. In 2007 Gazprom plans to supply more than 5 bcm of gas.

The Leningrad Oblast consumers do not have the indebtedness to Gazprom for gas delivered. The Leningrad Oblast paid in advance more than RUR 136 as of November 1, 2007.

The average gasification level of the Leningrad Oblast is at 54.1 per cent including 68 per cent in cities and towns and 29.2 per cent in rural area. The average gasification level in Russia is at 58 per cent, 64 per cent and 40 per cent, respectively.

During 2002-2006 Gazprom will commit nearly RUR 670 mln for gasification of the Leningrad Oblast.

In 2007 Gazprom will commit RUR 900 mln for gasification of the region. As of November 1, 2007 Gazprom constructed 4 local gas pipelines in the territory of the region. Additionally, 1 gas pipeline is under the final stage of construction and other 2 gas pipelines are under construction pursuant to the schedule (the commissioning will be in December 2007). The Leningrad Oblast Government plans to switch 10 heating plants and more than 5000 households to natural gas.

The Gryazovets-Vyborg gas pipeline is under construction in the territory of the Leningrad Oblast. Gas will be also supplied via the gas pipeline to Nord Stream gas pipeline. The total length of the first section is 148.2 km. The first section was constructed in 2006. In 2007 Gazprom plans to construct 165 additional km of the gas pipeline.