113 kilometers long Talitsa-Baykalovo-Irbit branch pipeline has been commissioned in Sverdlovsk Region

The 113 kilometers long Talitsa-Baykalovo-Irbit branch pipeline has been commissioned in Sverdlovsk Region. The second start-up complex running 52.7 km and connecting Baikalovo Village and the town of Irbit was brought on line today. The first start-up section from Talitsa to Baikalovo which length is 60.3 km was put into operation on November 4, 2003.

The Talitsa-Baykalovo-Irbit branch pipeline has been constructed under the cooperation agreement between ITERA Oil and Gas Company and the government of Sverdlovsk Region (ITERA through its subsidiary ZAO Uralsevergaz has been delivering gas to the region since 1999 completely satisfying the demands of all groups of customers).

The total cost of the gas pipeline construction under the Sverdlovsk Region Gasification Program that amounted to RR 304.8 million was covered on a parity basis by ITERA and the government of the Region.

Additionally ITERA provided its funds (RR 111.5 million) for construction of gas distribution pipelines in Baikalovo Village and the town of Irbit running 2.8 and 8.1 km respectively, three block gas boilers with the total capacity of 12.4 MW in Baikalovo, two boilers of 2.8 MW and 12 MW in Irbit. Besides, an 85 MW boiler was reconstructed (switched to gas) in Irbit.

Commencement of natural gas deliveries to the east of Sverdlovsk Region is a matter of great economic and social importance. Conversion of local boilers from expensive coal and black oil to more moderately priced natural gas will impact greatly the Region’s economics and social infrastructure as well as its population. For example, average heat power rates will reduce by 23% in Baikalovo and by 47% in Irbit. At the same time, switching domestic needs from liquefied to natural gas, shutdown of liquefied gas stations sharply improves safety of the energy carrier transportation and utilization.

The total annual gas consumption will make 4.4 million cubic meters in Baikalovo and 40.6 million cubic meters in Irbit.

The pipeline building owner is ZAO Regiongaz-invest, the subsidiary of ITERA. Under the agreement with ZAO Regiongaz-invest the Uraltransgaz Company will operate and maintain the gas main, and OAO Kirovgradmezhraygaz will operate the distribution pipelines.

As reported before, the 75 kilometers long Arti – Mikhailovsk – Nizhniye Sergi branch gas pipeline also constructed with the financial participation of ITERA and 8.8 kilometers of supply networks in the town of Mikhailovsk were put into operation in August 2003.

According to the agreement between ITERA and the regional government ITERA will allocate RR 120 million annually for the Sverdlovsk Region gas infrastructure development – construction of gas pipelines and boilers. In 2003 ITERA had poured more than RR 200 million for these purposes.

ITERA and the government of Sverdlovsk Region have been cooperating in gas sector since 1999. Through its subsidiary, ZAO Uralsevergaz, ITERA fully covers the Region gas demands, solving the long standing gas shortage problem. The total volume of the blue fuel delivered to the regional customers from 1999 till 2003 has exceeded 80 billion cubic meters. In 2003 ITERA and the government of Sverdlovsk Region concluded the cooperation agreement whereby apart from gas deliveries ITERA will assist in the regional gasification and energy saving programs and social infrastructure development. Pursuant to the agreement from 2004 through to 2008 ITERA will deliver to the Middle Ural up to 88 billion cubic meters, including 17.0 billion cubic meters this year. Currently ITERA and Uralsevergaz completely supply the Sverdlovsk Region gas demand, always fulfilling their contractual obligations.

ZAO Uralsevergaz Press Service                                                                   Tel.: (3432) 72-88-57