OREANDA-NEWS. December 28, 2007.The Board of Directors has endorsed a Gazprom Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program for 2008.

The Board of Directors heard a report on the Gazprom Forecasting Investment Program, Budget (Financial Plan) and Cost Optimization (Reduction) Program Projections through 2009-2010.

Under the Investment Program for 2008, total investments will make up RUR 710.13 bln with capital investments projected at RUR 479.42 bln, long-term financial investments projected at RUR 203.71 bln.

Under the Budget for 2008, overall cash income & revenues will make up RUR 2,926 trln; liabilities, expenditures and investments will account for RUR 3,014 trln; financial borrowings will annually be RUR 90 bln.

The Cost Optimization (Reduction) Program for 2008 stipulates activities furthered to cost optimization (reduction) totally accounting for RUR 10.1 bln.

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The Gazprom Investment Program for 2008 and forecast for 2010 embraces the most promising investment projects.

In the production sector the major projects are: pre-development of the Bovanenkovskoye, Kharasaveyskoye and Shtokman fields. The work will continue on pre-development of the Kharvutisnkaya area of the Yamburgskoye, Yen-Yakhinskoye, Urengoyskoye, Zapolyarnoye and other fields.

In gas transportation the major projects are: the Bovanenkovo-Ukhta gas main system, Ukhta-Torzhok, construction of Gryazovets-Vyborg gas pipeline construction, Pochinki-Gryazovets, Murmansk-Volkhov, construction of SRTO-Torzhok gas main construction, expansion of the Urengoy gas transportation joint.

Capital investments will also be channeled to development of fields and gasification of the Irkutsk Oblast, Kamchatka Krai, Khabarovsk Krai, reconstruction of major funds and gas transportation, technical re-equipment of UGS facilities, provision of design and geological survey and operating drilling in fields.

The Long-Term Financial Investment Plan for 2008 particularly contemplates Gazprom participation in the Nord Stream, Sakhalin-2 projects as well as the projects of development and utilization of gas condensate and oil fields of the Arctic shelf of Russia including the Prirazlomnoye and Shtokman field. Additionally, the Plan stipulates the asset acquisition particularly Beltransgaz shares.

The Plan contemplates earmarking finance for field exploration and development projects abroad (in the Block 112 in the Republic of Vietnam, Bay of Bengal in India), as well as provision of long-term loans to Gazprom subsidiaries to operate in the Yuzhno-Russkoye field, Krasnoyarsk Krai, Caspian Sea Shelf.

Pursuant to the investment program, in 2008 it is planned to commission 1293 km of gas mains and branch pipelines, 7 compressor stations at pipelines and underground gas storage facilities with total capacity of 616 MW, 4 compressor stations, 1 installation of the integrated gas preparation. It is also planned to put into operation 84 exploitation gas wells and 19 wells at UGS.

The projects for transportation and UGS are nearly 49 per cent, for production – 48 per cent out of the total amount of capital investments for 2008.