Gazprom Commissions Kaliningrad Underground Gas Storage Facility

September 24, 2013

Gazprom has commissioned a new underground gas storage facility in Kaliningrad region, the company reported in a news release.

Taking part in the event were Alexey Miller, Chairman of the Gazprom Management Committee, Sergey Vakhrukov, Russian Deputy Minister of Regional Development, Stanislav Voskresensky, Deputy Presidential Plenipotentiary Envoy to the Russian Northwestern Federal District, Nikolai Tsukanov, Governor of the Kaliningrad Region, heads of Gazprom's structural units and subsidiaries as well as contracting companies.

The Kaliningrad UGS facility commissioning accords with Gazprom's sustained efforts aimed at developing gas supply to and gasification of the Kaliningrad Region. With a view to deliver additional gas volumes to the region, in 2009 the Company increased the throughput of the Minsk – Vilnius – Kaunas – Kaliningrad gas pipeline almost twofold – to 2.5 billion cubic meters a year as well as expanded the Krasnoznamenskaya compressor station.

As part of the Gasification Program, Gazprom has constructed 42 inter-settlement gas pipelines with a total length of 400 kilometers in the Kaliningrad Region starting from 2002, thus allowing to convert 24 boiler houses to gas and prepare over 5,500 household for gas supplies. As a result, the regional gasification level soared 23.2 per cent to 64.2, which is commensurate with Russia's average rate (64.4 per cent).

By now, two gas tanks with a total working capacity of 52 million cubic meters and maximum daily deliverability of 4.8 million cubic meters of gas (average gas consumption in the Region is 5.9 million cubic meters of gas) are ready to operate at the Kaliningrad UGS facility. A total of five independent tanks with an aggregate working capacity of 261 million cubic meters will be constructed at the UGS facility. Later on, the regional consumers will receive up to 12 million cubic meters of gas a day.

“A milestone event took place today: we commissioned the Kaliningrad UGS facility – Gazprom's first one in salt caverns. It is not just another facility on the Russian gas map. It is the experience we will use when constructing similar UGS facilities in Russia.

Such facilities have a number of apparent advantages. For instance, it is possible to promptly switch on the injection mode and change it to the withdrawal mode. This means that we will always have a full storage in Kaliningrad during the autumn-winter period and, therefore, a high degree of gas supply reliability. It is especially important as the Russian Government and Gazprom as well are looking closely after the energy security in the Kaliningrad Region. The Kaliningrad UGS facility commissioning resolves this issue,” said Alexey Miller.

As part of the event, Alexey Miller and Nikolai Tsukanov signed an Agreement of Understanding and Cooperation in relation to the project aimed at building an LNG regasification terminal on the Baltic coast of the Kaliningrad Region.

Pursuant to the Agreement, the Regional Government will provide whatever assistance possible to Gazprom in obtaining the approvals required for the construction as well as in the land allocation issues.

At the moment, an Investment Rationale to