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Press Release

Gazproms delegation takes part in Sakhalin Oil & Gas Conference 2008

October 3, 2008 - Yuzhno-Sakhalinsk today hosted the opening of the 11th Sakhalin Oil & Gas International Conference 2008. The Conference was attended by a Gazprom delegation led by Viktor Timoshilov, Head of the East-Oriented Projects Coordination Directorate.

A presentation given by Gazprom at the Conference stated that the Company was consecutive in implementing the Eastern Gas Program and launched the practical execution of top priority projects.

Gazprom rendered assistance to Sakhalin Energy in the technical, financial and environmental areas for successful completion of Sakhalin-2 stage two. This will make it possible to promptly launch LNG deliveries within the project.

Another top priority project of the Eastern Gas Program is the creation of the Sakhalin - Khabarovsk - Vladivostok gas transmission system. On September 1 this year the Russian Government entrusted Gazprom with commissioning the startup complex of this gas pipeline in the 3rd quarter of 2011. The launch of the Sakhalin - Khabarovsk - Vladivostok GTS will enable in the future to continue developing the Unified Gas Supply System in Russia's East through the construction of a GTS connecting Yakutia, Khabarovsk and Vladivostok as set out in the Eastern Gas Program.

The tight implementation schedule for the Sakhalin - Khabarovsk - Vladivostok investment project (practically two years less compared to standard lead time) requires clearly defined interaction and cooperation mechanisms between Gazprom and the regional authorities.

As it was emphasized in Gazprom's presentation, the Sakhalin - Khabarovsk - Vladivostok gas pipeline would enable to supply the Russian Far East consumers with gas from the Chaivo, Odoptu, Arkutun-Dagi fields and in the long-term from the Kirinskoye gas & condensate field, Kirinsky, Vostochno-Odoptinsky, Ayashsky and other promising blocks offshore the Sakhalin Island. Pursuant to the decision of the Russian Prime Minister Vladimir Putin at the September 1, 2008 circuit meeting in Vladivostok, the work is underway for Gazprom to obtain in 2008 the subsurface use rights for the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks with the aggregate resources of 1.7 bln t of coal equivalent, of which 80 per cent is gas. All this establishes the necessary conditions for the successful implementation of the project.

Within the frames of the Conference Gazprom's delegation had a working meeting the Sakhalin Oblast Governor Alexander Khoroshavin. The parties addressed the progress with the Agreement of Cooperation between Gazprom and the Sakhalin Oblast Administration, and the Accord on Gasification. The parties pointed out that in the near future the General Gas Supply and Gasification Scheme for the Sakhalin Oblast would be submitted for approval by the regional authorities. A top priority project of the said General Scheme is the conversion to natural gas of the fourth power unit at the Yuzhno-Sakhalinsk CHP-1. This will be of crucial significance for bettering the ecology in Yuzhno-Sakhalinsk as well as enhancing the operational reliability of Sakhalin's power grid.

Within the Conference Gazprom transgaz Tomsk (a wholly owned subsidiary of Gazprom) and Sakhalin Energy entered into a five-year agreement for the operation and maintenance of Sakhalin-2 gas and oil pipelines.

Background:

In 2006 Gazprom and the Sakhalin Oblast Administration inked the Agreement of Cooperation and Accord on Gasification.

The September 2007 Order by the Russian Federation Industry and Energy Ministry approved the Development Program for an integrated gas production, transportation and supply system in Eastern Siberia and the Far East, taking into account potential gas exports to China and other Asia-Pacific countries (Eastern Gas Program). Gazprom was appointed by the Russian Federation Government as the Program execution coordinator.

The reserves of the Chayanda oil, gas and condensate field in Yakutia, Sakhalin-3 Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks offshore Sakhalin and Zapadno-Kamchatsky prospect offshore Kamchatka are of key significance for the development of gas supply in the Far East and formation of a unified gas supply system. The Russian Government awarded Gazprom the subsurface use license for the Chayanda oil, gas and condensate field, and Kirinskoye gas and condensate field. Work is already underway to start operations at these sites in 2008. In accordance with the Russian Government's decisions adopted at the September 1, 2008 circuit meeting in Vladivostok, the work is in progress to obtain in 2008 licenses for the Kirinsky, Vostochno-Odoptinsky and Ayashsky blocks, and the Zapadno-Kamchatsky prospect.

The Sakhalin - Khabarovsk - Vladivostok gas transmission system (GTS) is a top priority of the Eastern Gas Program. In pursuance of the order by the Russian Government and the decision by Gazprom's Board of Directors, the work is currently underway to create the GTS for the purpose of developing gas supply to the Khabarovsk Krai and Sakhalin Oblast, and organizing gas supply to the Primorsky Krai in 2011 at the latest.

Gazprom invest Vostok (a wholly owned subsidiary of Gazprom) is the customer of investment projects for the construction of the Sakhalin - Khabarovsk -Vladivostok gas trunklines.


2008-10-06

Please see Gazprom company electronic office

Information Directorate, PAO Gazprom
+7 495 719-10-77
pr@gazprom.ru

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