Actuality March 21, 2008

   Industrial gas production from coal bed methane starts at Kuzbass in the 4Q 2009. The deputy chairman of Gazprom board Alexander Ananenkov confirmed this at the working meeting with the governor participation Aman Tuleev.

At the meeting were discussed the issues of the innovative project realization,

the largest in the Kemerovo region history.

   The regional adm inistration press-service reported that Kuznetsk Company engaged

in methane production at Kuzbass becomes Gazprom subsidiary in April, 2008.

The oil and gas giant increases its stake in it up to 100%. The "methane project" is a high priority for Aman Tuleev. And he also marked that the company has to reach the methane production level at 4-5 bcm a year in the nearest future. In the governor opinion, the Kuzbass industrial enterprises require exactly such amount of gas. It is important to finalize the prospecting projects development in new areas – Taldinskaya (Prokopyevsk district) and Naryksko-Ostashkinskaya (Novokuznetsk district) to attain such indices in 2008. Moreover, it is necessary to drill 8 wells for test production to determine the optimum methane production areas on Taldinsk deposit., and to drill 60 wells a year to attain the full capacity.

   According to Alexandr Ananenkov, the National Reserve Bank will give Kuznetsk Company the RUR 250 mln.

credit to continue these works in 2008 against Gazprom securities. It is planned to drill around 1500 wells 600-900 meters depth in Kuzbas within 10 years. Currently, operate 4 wells on Gazprom scientific ground in the Prokopyevsk district in the South area. They continuously surface gas daily. The experimental methane delivery to the consumers will be carried out already this year.

   The industrial methane production project has been developed in Kuzbass in the 1990th. The governor Tuleev took the lead. Since 2001 Gazprom joined this project. The Kemerovo governor underlines that coal bed methane production will allow creating the new economy industry, and also reduce methane-rich mines and promote mine safety in Kuzbas.

We will remind that most mines' accidents take place in terms of methane explosion. It is also supposed that due to this gas production will be solved the ecological issues.

In fact, the Kuzbass mines belch around 28 000 cu m of gas in the production process annually.

   The problem is that Russia does not have the experienced specialists in industrial methane production.

They are only in the USA

and Australia.

"It is necessary to start training and retraining of such specialists either in Gubkin Russian State University of Oil and Gas or in the Kuzbass State Technical University already this year", Tuleev is sure.

Moreover, the methane status as the independent mineral product is not determined in the regulatory documents, and it means that it is not registered in the State Reserve Register. All tax deductions possible at the regional level within the act framework will be given to the new innovative project.

At the federal level Kuzbass and Gazprom are intended to get the zero tax rates for mining in the first years of project realization. The experts estimate the methane supplies in the Kemerovo region at 13 trln cu m. Methane production technologies were first applied in the USA. For example, if in 1991 there were produced 4 bcm of gas, so today

the figure is 55 bcm.