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Gazprom

December 16, 2005

Meeting on the Russian Federation regional gasification held in Novii Urengoi

A meeting on the Russian Federation regional gasification chaired by Dmitry Medvedev, First Deputy Prime Minister of the Government of the Russian Federation, was held today in Novii Urengoy.

The meeting was attended by the Presidential Plenipotentiary Envoys to the Federal Districts: Kamil Iskhakov, Anatoly Kvashnin, Ilya Klebanov, Dmitry Kozak, Alexander Konovalov, Pyotr Latyshev, Georgy Poltavchenko; Alexey Miller, Chairman, Gazprom Management Committee; Gazprom’s and its affiliates’ representatives.

Dmitry Medvedev noted in his opening remarks: “We are gathered here today to review the implementation of a social project that has federal importance – Gazprom’s new program on gasification of Russia”.

He underlined that the average level of gasification should be increased to 60% (from the current 53%) within the next two to three years, and a foundation for further growth in this respect must be created. The program includes gasification of more than 1120 settlements. As a result, the quality of life of about 11 million people will be improved.

Dmitry Medvedev noted that investment volumes increase in gasification is extremely important both socially and economically.

Among major tasks facing Gazprom and the Russian regional authorities, according to Dmitry Medvedev, are efficient utilization of financial resources, cooperation between Gazprom and the regional authorities, synchronization of Gazprom’s intra-settlement gas pipeline construction and the construction of local gas pipelines done by the regional authorities, and consumers’ preparation for utilization of gas. Besides, gasification of low income households must be supported financially.

Alexey Miller presented his report at the meeting. He said that Gazprom is actively involved in gas supply development and regional gasification. RUR 11.5 billion was invested in these projects in the past three years.

Gazprom analyzed further possibilities in the gasification of Russian regions and developed a corresponding program for 2005-2007. The program includes construction of 12000 km of new gas distribution pipelines and capacity increase of pipelines already in use. Investment of RUR 35 billion will be made in the course of the program’s implementation. Additional RUR 1.1 billion will be invested by Gazprom in technical overhaul and upgrading of the existing gas distribution pipelines. Additional annual production of 9 bcm of natural gas will be required to successfully implement the program, including 4.4 bcm for residential use.

Alexey Miller asked the meeting’s participants to pay special attention to the necessity of carrying out gasification preparation, since this activity barely started in a number of regions. Regional authorities must step up their involvement in solving the problem of past dew payments for gas already supplied, since full and timely payment is the main precondition of continuous natural gas supplies to regional consumers. Alexey Miller noted, that the Southern Federal District has the largest outstanding amount dew among federal districts.

An important part of regional gasification is the improvement of Gazprom’s regional gas distribution networks by means of gradual unification of gas distribution companies into a single unit within the Russian Federation administrative units.

It is necessary to optimize the level of consumption of natural gas by household consumers which vary considerably within a single climate zone.

Alexey Miller noted that Gazprom looks forward fruitful cooperation with regional authorities and their help in prompt resolution of issues related to executive decisions on design and construction initiation, selection of gas transportation routes and land allotments, technical conditions and other details.

The regions must take additional measures to step up consumers’ readiness for gas utilization so that expensive gasification infrastructure is fully utilized.

Natural gas supply increases need to be paralleled by local improvements in energy conservation and gas utilization efficiency improvements, and rational pricing and tariffs policies in natural gas distribution and supply should be worked out at the federal level.

During the meeting a television conference was held with Gazprom’s Central gas flow dispatching department located in the company’s headquarters. The issues of gas supplies in the national market were discussed during the conference. It was noted that Gazprom fully covers the needs of natural gas consumers and is ready to assure further growth of natural gas consumption in Russia.

Concluding the meeting, Dmitry Medvedev noted: “Alexey B. Miller’s report shows that Gazprom is fully prepared for implementation of an important national program of the Russian Federation regional gasification. The amount of work is unprecedented, and time is very limited. Gazprom’s new initiative of further gasification will be fully supported at the federal level, and, I am sure, at the regional level as well. Today we initiated another corporate project of national importance”.

Reference:

Currently the level of gasification in Russia is 53%, including 60% in cities and towns, and 34% in rural areas. The total amount of gasified apartments and houses is 28.7 million. There are 3500 branch gas pipelines totaling more than 40000 km in length and 430000 km of gas distribution pipelines servicing the national market.

Gazprom’s programs on regional gasification are based on contemporary methodological principles. These are based on General layouts of gas supply and gasification developed on the principle of optimization of regional energy balances and social importance of gas consumers. The General layouts include utilization of local resources, energy conservation possibilities in natural gas utilization, full use of contemporary technology, materials and construction methods.

Design and construction of branch gas pipelines, gas distribution networks and stations are all part of a single cycle, their capacities are tied to gas production and transportation via the United gas transmission system possibilities.

The selection of projects and construction scheduling is based on economic efficiency and rate of return of investments. At the same time, the most important construction projects are selected considering the social importance as well.

The 2005-2007 gasification program stipulates gasification of 3851000 apartments and households, including 2673000 in cities and towns, and 1178000 in rural areas, and gasification of about 20000 social and community sector consumers (hospitals, kindergartens, schools, etc.), and more than 5000 rural heating facilities and 500 agricultural companies.

 

 

 

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