Management Committee reviews progress of gas supply and gas infrastructure expansion in Russian regions

The Gazprom Management Committee took note of the information about the ongoing implementation of the Company’s programs aimed at expanding gas supplies and gas infrastructure in Russian constituent entities, synchronization with regional programs for converting housing, utilities, industries and other entities to gas, and extension of gas grid coverage in the Krasnoyarsk Territory.

It was highlighted that the creation of gas supply infrastructure for gas grid expansion in Russian regions is a strategic activity of Gazprom. These works are carried out by the Company in cooperation with regional administrations and are based on General Schemes for Gas Supply and Gas Infrastructure Expansion and five-year programs for gas supply and gas infrastructure expansion.

At present, the gas supply and gas infrastructure expansion programs for 2016–2020 are nearing completion. As per preliminary data, by the end of this period Gazprom will have built 9,830 kilometers of gas pipelines and made it possible to supply gas to 1,358 localities.

Accordingly, the gas penetration rate in Russia will grow from 66.2 per cent (as of the beginning of 2016) to 71.4 per cent by January 1, 2021. The rates of gas grid growth in rural areas will be 2.6 times higher than those in cities and towns.

The programs for the next five-year period – 2021–2025 – are going to be signed with 67 regions. The documents provide for a significant increase in construction volumes. For instance, Gazprom will be responsible for the construction of 24,400 kilometers of gas pipelines and creation of the conditions required for gas supplies to 3,632 localities. The scope of works on the reconstruction and technical upgrade of gas distribution stations will be expanded, which will generate opportunities to supply more gas to the existing consumers and connect new ones. In addition to that, it is planned to carry out off-grid gas supplies through the use of liquefied natural gas.

It is of particular importance to ensure that regional authorities make timely efforts to prepare consumers for receiving gas. To that end, work synchronization plans are signed every year.

If the programs proceed exactly as planned, Russia’s gas penetration rate will rise to 74.7 per cent by January 1, 2026. In 35 regions, gas grid expansion will be completed to the maximum extent technically possible.

The meeting also touched upon gas infrastructure expansion in the Krasnoyarsk Territory. A scientific research study commissioned by Gazprom is currently underway with the purpose of adjusting the region’s General Scheme for Gas Supply and Gas Infrastructure Expansion. Among other things, the study aims to develop a regional fuel and energy balance plan taking into account inter-fuel competition, as well as to devise gas consumption scenarios for different price conditions.

Gazprom’s relevant units and subsidiaries were tasked to continue the implementation of the programs for gas supply and gas infrastructure expansion in Russian regions.

The issue of the ongoing implementation of the programs for gas supply and gas infrastructure expansion in Russian constituent entities by the Company, synchronization with regional programs for converting housing, utilities, industries and other entities to gas, and extension of gas grid coverage in the Krasnoyarsk Territory will be submitted for consideration by the Gazprom Board of Directors.