Gazprom history 2006 On January 1

GAZPROM HISTORY
2006
On January 1, following Naftogaz Ukrainy’s refusal to seal a gas supply contract over 2006, Gazprom suspended, starting 10 am Moscow time, gas shipments to Ukrainian consumers, with an official notice forwarded to the Ukrainian side on 31 December 2005.
On January 4, Gazprom and Naftogaz Ukrainy finally settled their standoff surrounding cooperation in the gas sector and agreed to shift over to market rates for natural gas supply and transit. The parties reached an accord that from 1 January 2006 Gazprom would ship gas to RosUkrEnergo under a price scheme fixing an initial gas price at US $230 per 1,000 cu m. In that regard Gazprom and RosUkrEnergo entered into a pertinent five-year contract.

On January 16, Gazprom and Moldovagaz signed a contract for natural gas transit and supply to the Republic of Moldova. In the first quarter of 2006 Russian gas would be piped to Moldova at US $110 per 1,000 cu m. At the same time the parties achieved accords on the activity of the Moldovan-Russian Moldovagaz joint venture, potential increase of Russia’s participation share in Moldova’s gas transmission system and conservation of its structural integrity.

On 18 January, the RF Nature Ministry’s State Commission for Mineral Reserves approved an increase in the Shtokman gas condensate field reserves. The reserves were increased based on the data obtained through 3D seismic survey.

On January 18, Gazprom hosted a meeting dedicated to gas deliveries to Russian and foreign consumers during the cold snap. Attending the meeting were the heads of Gazprom core business units. The meeting particularly underscored that gas supply to Russian consumers was 40 per cent above the target and to European consumers was 7 per cent up on the contractual amount.

On January 16-18, during the cold snap Gazprom supplied an extra 750 mln cu m of gas to Russian consumers, including 310 mln cu m to the household sector. The extra gas amount stemmed from 130 mln cu m and 630 mln cu m in additional gas production and gas retrievals from UGS facilities, respectively.

On January 16-20, Gazprom additionally supplied 1.3 bcm of gas. Only on January 19 additional supply volume was at 750 mcm. The population and municipal consumers were additionally supplied with 310 mcm. Said gas supply was provided due to extra gas production of 130 mcm and additional gas extraction of 630 mcm of gas from UGS.

On January 20, in the course of the visit Alexey Miller, Chairman of the Gazprom Management Committee met with Islam Karimov, President of the Republic of Uzbekistan, Utkir Sultanov, Uzbek Deputy Premier and Abdusalom Azizov, Chairman of the Management Board of the National Holding Company Uzbekneftegaz. The parties signed documents setting a purchase price of Uzbek natural gas and a rate of gas transit across Uzbekistan.

On January 23, Gazprom and the Khabarovsk Krai Administration signed a five-year Agreement for gasification.

On January 25, headed by the Management Committee Chairman Alexey Miller, Gazprom delegation took part in an extraordinary session of the Eurasian Economic Community (EvrAzES) in Saint-Petersburg, holding meetings with Islam Karimov, President of the Republic of Uzbekistan and Abdusalom Azizov, Chairman of the National Holding Company Uzbekneftegaz. Alexey Miller and Islam Karimov discussed issues in relation to a Production Sharing Agreement (PSA) for Ustyurt fields. The parties signed an Accord on the major principles and provisions of PSA for the Urga, Kuanysh and Akchalak group of fields in Uzbekistan’s Ustyurt region. The talks with Gazprom and Uzbekneftegaz resulted in an Agreement on the major principles of geological survey for Uzbekistan’s Ustyurt investment blocks and subsequent field development under the PSA terms.

On January 16-25, Gazprom additionally supplied Russian consumers with 2.2 bcm of gas. The amount of gas supplied to outside the FSU by the Yamal-Europe and Blue Stream gas pipelines had been in excess of existing contractual transit commitments.
On January 27, within the working visit of Gazprom delegation to Kyrgyzstan, the parties signed a Memorandum of intentions to set up a joint Russian-Kyrgyz oil & gas venture in the oil and gas sector between Gazprom and the Republic of Kyrgyzstan. The Memorandum contains accords to further deepen successful cooperation while developing strategic projects, namely exploring and producing natural gas, debottlenecking existing and creating new gas transmission capacities in the Kyrgyz Republic, and supplying refining products and liquefied hydrocarbon gases.

On January 27, led by Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee, Gazprom delegation visited the Republic of Serbia, holding meetings with Boris Tadic, Serbian President, Vojislav Kostunica, Serbian Prime Minister and Miroljub Labus, Serbian Deputy Prime Minister. The parties reviewed issues of deeper cooperation in the gas sector, including in natural gas deliveries to Serbia and promising investment projects in the Republic.

On January 28, led by Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee, Gazprom delegation went to the Socialist People's Libyan Arab Jamahiriya, holding a meeting with Abdulla Salem El-Badri, Chairman of the Libyan National Oil Company (NOC). The parties discussed potential joint businesses in the Libyan oil & gas sector, including gas infrastructure developments, Gazprom participation in hydrocarbon production, transmission and processing projects and mutual consultations in hydrocarbon marketing aspects.

On January 29, repair work was completed at the North Caucasus – Transcaucasus gas main. With the accident damage fully eliminated, the pipeline was refilled with gas immediately upon finalization of repairs.

On January 29, led by Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee, Gazprom delegation visited the People's Democratic Republic of Algeria, holding meetings with Ahmed Ouyahia, Algerian Prime Minister, Mourad Medelci, Co-Chairman of the Russian-Algerian Intergovernmental Commission, Karim Djoudi, Algerian Minister Delegate to the Finance Minister in charge of the financial reform and Youcef Ourradi, Algerian Deputy Minister of Energy and Mining. The delegation also met with Mohamed Meziane, Chief Executive Officer of the state oil company Sonatrach. The parties addressed the prospects for the cooperation between Gazprom and Algeria in the oil & gas sector, agreeing to promote large-scale cooperation in the hydrocarbon exploration, extraction, transmission, processing and marketing sectors.

On January 31, the Gazprom Headquarters hosted a meeting on the performance of Gazprom subsidiaries during January’s cold snap. Chaired by Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee, the meeting was attended by the heads of the core production units, Marketing and Gas & Liquid Hydrocarbon Processing Department, all the gas production and transmission subsidiaries, Mezhregiongaz and Gazprom export. The meeting emphasized that during the exceptionally low temperatures on the Russian territory Gazprom had taken all necessary steps to provide uninterrupted gas deliveries to Russian and foreign consumers, with special attention placed on gas supply to socially significant facilities and the household sector. Gazprom utilized all its gas production, underground storage and transmission reserves. During the January 16-28 maximum temperature drops the Gazprom Group of companies extracted 0.8 bcm of gas above the target preset, with a total of extra 1 bcm produced over January. Additional 2.6 bcm of gas was retrieved from underground gas storage facilities, with maximum daily withdrawal rates achieved on January 19. Thus, during January 16-28 Gazprom provided the United Gas Transmission System with an extra 3.4 bcm of gas. According to a report presented at the meeting, within January 16-28 Gazprom additionally supplied domestic consumers with some 2.3 bcm of gas. Industrial consumers however did not fulfill a schedule prescribing their conversion to standby energy sources (Schedule №1) and daily spared not more than 45 mln cu m of gas versus the 211.5 mln cu m requirement. A focus of the meeting also fell on sustainable gas supply to Europe during the exceptionally cold weather period. As it was underscored, the amount of gas supplied to outside the FSU by the Yamal-Europe and Blue Stream gas pipelines had been in excess of existing contractual transit commitments.

On February 1, the Gazprom Board of Directors resolved to convene the Annual General Shareholders Meeting of Gazprom on 30 June 2006 in Moscow. The list of shareholders entitled to participate in the Shareholders Meeting, list of Nominees for the Gazprom Board of Directors and Audit Commission, the Draft Shareholders Meeting Agenda and other related issues were settled.

On February 1, the Gazprom Board of Directors heard a report on the role of independent gas producers in supplies to the Russian market and fulfillment of Gazprom export portfolio commitments. The Board considered it expedient to continue using gas resources of independent suppliers.

On February 1, Alexey Miller, Chairman of the Gazprom Management Committee met with Rumen Ovcharov, Economy and Energy Minister of the Republic of Bulgaria. The parties discussed the prospects for mutual cooperation in the oil and gas business, focusing on the possibility of increasing gas transmission volumes. The main focus of the meeting fell on the matter of switching to the European terms & conditions for Russian gas delivery and transit via Bulgaria. Additionally the parties reviewed the possibility of jointly constructing the Bourgas - Alexandroupolis oil pipeline.

On February 2, headed by Alexey Miller, Chairman of the Gazprom Management Committee, Gazprom delegation completed its visit to the Greek Republic, meeting with Kostas Karamanlis, Greek Prime Minister, Dimitris Sioufas, Greek Development Minister, top executives of the Greek Public Gas Corporation DEPA and the Russian-Greek joint venture Prometheus Gas. The parties discussed issues of long-term cooperation in the gas sector, addressing the possibility of increasing Russian gas supply to Greece, in particular, extending the existing Contract after 2016 and developing new transmission routes (with the Blue Stream pipeline to be potentially used along with the Balkan corridor), which might lead to Greece’s converting into a transit country when gas is delivered to southwestern Europe. The meetings also addressed the Bourgas - Alexandroupolis oil pipeline construction issue.

On February 3, a presentation of the Masterpieces of Russian Art. Golden Map of Russia arts album took place in Paris at the official residence of the Ambassador of the Russian Federation to France. The album was first published by The State Tretyakov Gallery in partnership with the Fatherland’s Treasures museum supporting foundation and with Gazprom financial backing. The French language edition of the album was financed by Gaz de France.

On February 3, headed by Alexey Miller, Chairman of the Gazprom Management Committee, a Company’s delegation paid a working visit to Turkey, meeting with Mehmet Hilmi Guler, Turkish Energy & Natural Resources Minister. The parties discussed the prospects for collaboration in the gas sector. In particular, a focus fell on deliveries of Russian gas and development of underground gas storage facilities. The meeting also addressed the issue of implementing projects on gas transmission via Turkey to third countries: to Greece and southern Italy as well as Israel and other countries of the Near East. The parties agreed to discuss matters concerning the foundation of a joint venture for those projects. In addition Alexey Miller and Mehmet Hilmi Guler discussed issues in relation to Gazprom participation in gas marketing to Turkish end consumers and gas transmission & gas distribution infrastructure development in Turkey. The parties also reviewed matters surrounding the Samsun-Ceyhan oil pipeline.

On February 8, Alexey Miller, Chairman of the Gazprom Management Committee met with Janos Veres, Finance Minister of the Republic of Hungary and Janos Koka, Hungarian Economy and Transport Minister. The parties discussed issues of long-term collaboration in the oil & gas sector. The parties addressed the possibility of extending the long-term contracts for Russian gas delivery and transit.

On February 9, in the frames the working visit to Brazil, Gazprom delegation met with the top management of Petrobras oil and gas company. The parties discussed matters in respect to long-term mutual cooperation in the energy sector.

On February 9, Alexey Miller, Chairman of the Gazprom Management Committee met with Marc Franco, Head of the European Commission’s Delegation to Russia and Martin Vukovich, Ambassador Extraordinary and Plenipotentiary of Austria to the Russian Federation. The parties discussed the prospects for collaboration between Russia and the European Union in the energy sector.

On February 14, Gazprom delegation paid a working visit to Venezuela, meeting with the leadership of Venezuela’s Energy and Petroleum Ministry and the top management of Petroleos de Venezuela SA (PDVSA). The parties also addressed the issue of constructing a Venezuela-Brazil-Argentina gas main to be fed from Venezuela’s natural gas reserves.

On February 17, led by Alexey Miller, the Gazprom Management Committee Chairman, Gazprom delegation paid a working visit to Turkmenistan. Within the visit Alexey Miller met with Saparmurat Niyazov, President of the Republic of Turkmenistan. The parties discussed current cooperation issues, highly appreciating the results of bilateral interaction and pointing to the reliability of Turkmenistan as Gazprom business partner.

On February 18, Gazprom took part in the inauguration of a fully ramped up complex of the Vyngayakha and Yety-Pur gas fields.

On February 26, the Gazprom Board of Directors agreed on Gazprom acquisition of a 51 per cent stake in NEGP Company from ZGG GmbH.

On February 26, the Board heard a report on Gazprom gas supply strategy for the Russian Federation regions, approving the Company’s activities in said sector over 2005 and ordering to keep up the same pace in 2006 and 2007. The Board tasked the Management Committee with earmarking in the Program on gas supply to the RF constituents at least RUR 17.6 bln for 2006 and RUR 12.2 bln for 2007.

On February 26, the Board of Directors approved the conclusion of a Supplementary Agreement №1 to the existing Contract between Gazprom and Northgas as a deal of corporate interest.

On February 26, the Board of Directors agreed on Gazprom acquisition of a 50 per cent stake in ROSUKRENERGO AG from Gazprombank (Gazprom subsidiary).

On February 26, the Board of Directors approved Mezhregiongaz’s purchase of additional shares in the following regional gas companies: Ivanovoregiongaz, Kirovregiongaz, Udmurtregiongaz, Vladimirregiongaz, Mosregiongaz and Bashkirgaz. Mezhregiongaz is acquiring additional stock in regional gas companies with the view of strengthening corporate control. The Board also acknowledged the expediency of increasing Gazprom stake in Rosshelf.

On February 26, the Board of Directors heard a report on Gazprom strategy in the gas production sector and Program on comprehensive development of the Yamal Peninsula on- and offshore fields. The Gazprom Management Committee was entrusted with further updating the Program based on major technical solutions and economic parameters of the Substantiations of investment in the Yamal’s Bovanenkovo field development and transmission facilities, pending public expertise.

On February 27, the Board endorsed Gazprom investment program, budget (financial plan) and cost optimization (reduction) program for 2006.

On February 28, Gazprom took part in the inauguration of the Zambrow compressor station at the Polish section of the Yamal-Europe gas main.

On March 10, a meeting of the Working Group for the Gazprom intra-corporate governance structure improvement was held. The parties discussed and approved a draft version of the Consolidated Project on the foundation of Gazprom subsidiaries within the Gazprom intra-corporate governance structure streamlining process.

On March 11, led by Alexey Miller, Chairman of the Gazprom Management Committee, the Company’s delegation paid a working visit to the People's Democratic Republic of Algeria. Within the visit Alexey Miller met with Chakib Khelil, Algerian Energy & Mining Minister. Gazprom delegation also conducted negotiations with Mohamed Meziane, President and Chief Executive Officer of the state oil & gas company Sonatrach Algeria. The parties reached agreements to sign a Memorandum of Understanding between Gazprom and Sonatrach, foreseeing deeper comprehensive cooperation in the oil & gas sector based on joint projects in Russia, Algeria and third countries.

On March 16, Gazprom and Institute of Aviation Motors named after P.I. Baranov (CIAM) inked a three-year Memorandum on Cooperation.

On March 16, within the working visit of Gazprom delegation to Canada, Gazprom and Petro-Canada signed an Agreement on Cooperation within the Baltic LNG project.

On March 16, Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee met with Dinsha J. Patel, India’s Minister for Petroleum & Natural Gas. The parties discussed issues of cooperation between Gazprom and Indian companies in the oil & gas sector. The parties also addressed the potential for pipeline natural gas supply to India and agreed to go on discussing Gazprom possible participation in said projects.

On March 19, within the working visit of Gazprom delegation to Israel, Alexey Miller met with Ehud Olmert, Israel’s Acting Prime Minister. In addition, Gazprom delegation held talks with Ronnie Bar-On, Israel’s Minister of National Infrastructures. The parties paid special attention to Russian gas supply options as well as cooperation in gas marketing to Israel, in power generation issues inclusive.