Alexey Miller, Chairman of the Gazprom Management Committee and Vyacheslav Pozgalev, Governor of the Vologda Oblast today sealed at the Gazprom Headquarters a Cooperation Accord between the Vologda Oblast Government and Gazprom for 2007 and 2008. The Accord was signed within the scope of the existing Cooperation Agreement.

Under the Accord, the parties confirmed their mutual interest in constructing the Northern Tyumen Oblast – Torzhok and Gryazovets – Vyborg gas pipelines as well as in expanding a system of gas trunklines within the Yamal project.

The Accord contemplates implementing a range of programs and projects in the region over 2007 through 2008, including a regional gasification program. Gazprom will participate in projects and programs set out in the Accord based on the pay back principle.

When drafting annual budgets the Vologda regional authorities will allocate funds to fully pay for gas deliveries to budget-sponsored companies. The regional budget will also earmark finance to offset natural gas payments by privileged consumers subject to eligibility under the Russian Federation law.

The regional authorities will assist Gazprom in fully settling gas accounts with consumers, will continue providing the population with gas metering devices and will contribute to timely setting economically sound gas consumption standards in the absence of meters.

On its part, Gazprom will secure natural gas supply to the population and budget-sponsored customers with due regard of available capacity in the Unified Gas Supply System and allocated gas quotas throughout Russia provided gas deliveries are paid up in full.

Gazprom will also continue geological prospecting on the regional territory so as to construct an underground gas storage facility.

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The Cooperation Agreement between Gazprom and the Vologda Oblast Government was entered into in June 2003, with the Gasification Accord signed in January 2005.

Natural gas penetration in the residential sector of the Vologda Oblast is currently at 49.2 per cent including 73.1 per cent in cities, towns & settlements and 11.5 per cent in rural area. The analogous figures throughout Russia average 54, 61 and 36 per cent, respectively.

Under its 2002-06 Gasification Program for Russian Federation Regions Gazprom invested over RUR 228 mln to build gas distribution networks in the Vologda Oblast, with RUR 250 mln to be committed for these purposes this year.

In 2006 Gazprom supplied the region with nearly 6.3 bcm of gas and roughly the same amount is slated for this year.

As at April 1, 2007, natural gas deliveries to the Vologda Oblast have been paid for at 107.35 per cent, with the volume of advance payments reaching RUR 0.5 bln. Over 97 per cent of the natural gas supplied to the region is consumed by customers using gas metering devices.

Gazprom is currently constructing the Northern Tyumen Oblast – Torzhok gas main, with the length of the pipeline section built in the Vologda Oblast between 2004 and 2006 averaging 457 km. At present the work is focused on the construction of compressor stations and infrastructures.

In addition, the region is seeing the construction of the Gryazovets – Vyborg gas pipeline.