OREANDA-NEWS.   On the threshold of Gazprom's annual General Shareholders Meeting the Company's headquarters hosted today Press Conference “Gas Supply to Domestic Market. Executing Russian Regions Gasification Program”. Taking part in the Press Conference was Kirill Seleznev, Member of the Management Committee, Head of the Gas and Liquid Hydrocarbons Marketing and Processing Department, Gazprom; Director General, Gazprom Mezhregiongaz.

It was pointed out at the Press Conference that Gazprom Group was the largest gas supplier to the domestic market and operated exclusively in its regulated segment. In 2013 the Group sold 228.1 billion cubic meters of gas – an 8.7 per cent fall compared to the previous year. The main reasons for the decline were abnormally warm weather conditions during the year as well as an increase in gas supply by independent producers.

One of the most crucial problems the Company is still facing in the domestic market is the growing consumer debt for the supplied gas. In 2013 the overdue debt of all consumer groups to Gazprom Mezhregiongaz Group rose by RUB 32.8 billion and amounted to RUB 115.8 billion. During Q1 2014 it increased to RUB 141.6 billion.

As of April 1, 2014 the socially significant consumer groups account for the total of 75 per cent in the overdue debt structure: population – RUB 52.6 billion; utility companies – RUB 46.2 billion; budget-financed companies – RUB 6.5 billion. Of the total indebtedness of the population the North Caucasian Federal District accounts for 80 per cent. The highest overdue debt of utility companies falls on the Moscow Region, the Republic of North Ossetia-Alania, the Krasnodar Territory, the Republic of Kabardino-Balkaria, the Tver, Tula, Vladimir, Bryansk Regions and the Republic of Bashkortostan.

Considering a substantial debt growth, upon the end of the 2013/2014 heating season Gazprom Mezhregiongaz Group was bound to envisage measures aimed at the limitation and termination of gas supplies to some 700 utilities (in 57 regions), which had failed to execute contract liabilities.

Like in all the previous years, Gazprom fulfilled all of its obligations for the Russian regions gasification to the full. From 2005 to 2013 Gazprom's total investments in the Gasification Program made up approximately RUB 214 billion (excluding funds channeled to the construction of gas branches and gas distribution stations being an integral part of the regional gasification process). Investment figures came to RUB 33.9 billion in 2013.

As a result of the Program execution between 2005 and 2013, Russia's average gasification level rose from 53.3 to 65.3 per cent, including from 60 to 70.9 per cent in cities & towns and from 34.8 to 54 per cent in the rural area.

Meanwhile, it was pointed out that the failure of the majority of the Russian Federation constituent entities to prepare consumers for gas supplies in due time as well as enormous gas debts forced Gazprom to reduce the Gasification Program investment in 2014. Currently it is determined at a level of RUB 27.6 billion – 18.6 per cent less than in the past year. This figure may be adjusted depending on the execution of obligations by the regions.

The Press Conference also addressed the Company's future activities in Russia's regions.