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Gas Grid Coverage in Rural Areas Grows 1.7-Fold in 2005–2018

Source: 2/27/2019, Location: Asia

The Gazprom Board of Directors reviewed and took note of the information on the Company’s efforts to expand gas infrastructure in rural areas. It was highlighted that gas infrastructure expansion in Russian regions is a priority for Gazprom. This ambitious and socially significant project aims to improve the quality of life in Russian regions and make them more attractive to investors.

Gazprom’s activities in this regard are focused in particular on rural areas. Some 90 per cent of the gas pipelines built by the Company in 2005–2018 as part of the Gas Infrastructure Expansion Program are meant to deliver gas to rural communities. The overall length of these gas pipelines is about 30,000 kilometers. The conditions are now in place for bringing gas to upwards of 752,000 households and over 5,000 boiler houses and enterprises in almost 4,000 villages.

As a result, the gas penetration rate in Russian rural areas grew 1.7-fold over the period, skyrocketing from 34.8 per cent in 2005 to 59.4 per cent (by 24.6 per cent) as of January 1, 2019.

Works aimed at extending the gas grid are carried out by Gazprom together with regional authorities in accordance with their general schemes for gas supply and gas infrastructure expansion and the medium-term (five-year) programs agreed by the parties. These documents are drawn up and updated based on suggestions from regional authorities. The areas of responsibility are strictly delineated: Gazprom brings gas to the borders of towns and villages, and the regional authorities prepare consumers for gas supplies. The rates of gas grid expansion are contingent on the synchronicity of those activities.

However, only 10 out of the 66 regions that took part in the Gas Infrastructure Expansion Program in 2018 managed to fulfill all of their obligations. Those 10 constituent entities are the Belgorod, Omsk, Penza, Sakhalin and Yaroslavl Regions, the Republics of Kalmykia and Mordovia, the Chuvash Republic, and the Yamal-Nenets and Khanty-Mansi Autonomous Areas. Meanwhile, 14 regions are lagging significantly behind their work synchronization plans and 5 regions are consistently failing to fulfill their obligations.

Gazprom continues to expand the gas grid of Russian regions. In 2019–2020, the Company plans to build some 450 facilities (gas pipeline branches, gas distribution stations, and inter-settlement gas pipelines) in rural areas alone. If regional authorities meet their obligations to prepare consumers for gas supplies, natural gas will reach more than 230,000 households in approximately 1,000 inhabited localities.

The Management Committee was instructed to continue its efforts related to gas infrastructure expansion in rural areas.

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