Today in Bishkek, in the presence of Almazbek Atambaev, president of the Kyrgyz Republic, Alexey Miller, chairman of the board of Gazprom, and Turgunbek Kulmurzaev, chief executive officer of Kyrgyzgas, signed a Sales Purchase Agreement for a 100% share in the authorised share capital of KyrgyzgazProm LLC.
"KyrgyzgazProm" is the exclusive importer of natural gas in Kyrgyzstan, and the owner of the Republic's gas transport and distribution systems. Once the transaction is completed, KyrgyzgazProm LLC will be renamed Gazprom Kyrgyzstan LLC.
"The acquisition of KyrgyzgazProm is a logical continuation of our long-standing partnership with our Kyrgyz colleagues. Gazprom gets direct access to the country's market and Kyrgyzstan gets a guaranteed stable gas supply and significant investment for large-scale reconstruction and modernisation of their gas transport and production capacity. Gazprom is becoming a strategic investor in Kyrgyzstan's economy", Mr Miller said.
Valery Gulev, Managing Director of Gazprom International, Gazprom’s sole specialised company in the area of prospecting, exploration and development of hydrocarbon deposits outside the Russian Federation, took part in events during the visit of the OJSC Gazprom’s Chairman of the Board Gazprom to Kyrgyzstan.
The legal basis for the Sale Purchase Agreement for 100% of the shares in the authorised share capital of KyrgyzgazProm LLC is the Intergovernmental Agreement on cooperation in the sector for the transport, distribution and sale of natural gas within Kyrgyzstan, signed by the governments of the Kyrgyz Republic and the Russian Federation in July 2013.
KyrgyzgazProm LLC is a wholly-owned subsidiary of Kyrgyzgaz OJSC, which performs the functions of procurement, transport and distribution of natural gas in the Kyrgyz Republic. KyrgyzgasProm's asset portfolio includes more than 700 km of main pipeline and around 2300 km of distribution gas pipelines, and also 266 gas distribution points.
Since 2003, there has been a long-term agreement on cooperation in the gas industry between Gazprom and Kyrgyzstan government, with a term of 25 years.
In 2007, Gazprom and the Kyrgyz government concluded an agreement on the general principles for conducting geological exploration of the Republic's subsoil. A technical and economic assessment as well as a step-by-step programme for exploration work was prepared in the same year. The promising oil-and-gas-bearing fields of Kugart and East Mayli-su IV (or Sharkaratma), located in the South West of the country were identified as high-priority objects for exploration work. The licences for these fields were issued to Gazprom in 2008.
Gazprom International, a wholly-owned subsidiary of Gazprom and its single specialist company in the field of prospecting, exploration and development of hydrocarbon deposits outside the Russian Federation, was appointed to be the authorised company for implementing the programme of geological exploration work. Under a protocol signed in September 2011 between the government of the Kyrgyz Republic and the Russian gas concern, Gazprom International was entrusted with coordinating the activities for acquiring Kyrgyzgaz OJSC's assets.
Proven natural gas reserves in Kyrgyzstan are estimated to be 6 billion cubic metres. The Republic's own production of natural gas amounts to around 20 million cubic metres per year. Gas consumption is around 300 million cubic metres per year, of which 90% is imported from Uzbekistan and Kazakhstan.