Gazprom and Sakhalin Oblast Ink Cooperation Deal

Alexey Miller, Chairman of the Management Committee and Ivan Malakhov, the governor of the Sakhalin Oblast signed a Cooperation agreement that cover the following baseline directions:

--exploration and development of hydrocarbon deposits;

--construction of gas pipelines, installations for gas processing and gasification;

--construction of facilities for production of CNG and LNG;

--construction of power generating facilities;

--development and introduction of energy efficient gas technologies;

--development of the regional infrastructure.

The administration of the Sakhalin Oblast will assist OAO Gazprom in implementation of perspective projects at the territory of the region. First of all, this relates to the issues of the land areas allocation to the Gazprom Group enterprises for construction of industrial and social facilities, to the processing and the state registration of the contracts of rent for the land areas, to the technical inventory of the real estate objects as well as the state registration of the rights for them. The administration supports the intention Gazprom to receive licenses for the right of land, water and minerals use for territories of the Oblast and the adjoining maritime shelf. Authorities of the region will also assist the Company in performing functions of the coordinator of activities on implementation of the Eastern program.

In its turn, Gazprom will develop production activities of prospecting, exploration and development of the hydrocarbons fields in the Sakhalin Oblast and the adjoining maritime shelf. According to the Concept of involvement of OAO Gazprom in the gasification of the regions of Russia, the Company will take part in gasification of the area. During implementation of its projects Gazprom will use without any prejudice Gazprom the local labor and material resources.

During the meeting Alexey Miller and Ivan Malakhov have discussed the issues related to establishment of the OAO Gazprom representative office at the Sakhalin.

"Arrival" of Gazprom to the Sakhalin will give a strong impetus to realization of large-scale oil and gas projects in the region and to gasification of the area. This will help to create new workplaces, to fill up the local budgets, and to increase the investment attractiveness of the region", - Ivan Malakhov has mentioned.

"The Sakhalin Oblast is a region of strategic importance for Gazprom. Oil and gas fields, located on its territory, must be used, first of all, for reliable supply of the energy carriers to the domestic consumers. Construction of a united system for gas supply in the Eastern Siberia and the Far East will allow us to use most effectively the natural resources of Sakhalin so that to reinforce the socio-economic stability of Eastern regions of Russia, and to arrange export deliveries of the energy carriers to the countries of Asia-Pacific", - Alexey Miller has stated.

A Cooperation agreement between OAO Gazprom and the administration of the Sakhalin Oblast was signed for the first time ever.

The Island of Sakhalin is a perspective center for oil and gas production, it is due to the availability the significant proved reserves of oil and gas, and also by the favorable geographical position of the island – it is close to the potential consumers in the countries of Asia-Pacific, including Japan, Korea, the Peoples Republic of China and the USA.

The level of gasification of the Sakhalin Oblast equals to 9 % now.

Today Gazprom does not supply gas to consumers of the Sakhalin Oblast. The Company plans to establish its own resource base in the region, to form up and develop the Sakhalin-Khabarovsk-Vladivostok gas transmission system and to create a reliable gas supply system for the regions of the Far East.