Russia’s Gazprom set to take part in Armenia-Iran gas pipeline construction

Iravunk, Yerevan
23 Nov 04

ArmRosgazprom, a Russian-Armenian joint venture where Russia’s Gazprom
holds 45 per cent of shares, is going to participate in a tender
to construct the Armenian sector of a pipeline that will deliver
natural gas from Iran, the company’s director-general has told Iravunk
newspaper. Karen Karapetyan also denied reports that the pipeline would
be used to export Iranian gas to European markets. The following is an
excerpt from K. Sarkisyan’s report by Armenian newspaper Iravunk on 23
November headlined “Gazprom is going to take part in the Iran-Armenia
gas pipeline construction”; subheadings have been inserted editorially:

It is clear that society cannot but be interested in the activity
of Armenia’s only gas supplier AyRusgasard ArmRosgazprom taking into
account the significance of the sphere. Moreover, the company is also
operating in a number of important spheres such as power export and
heating projects. Two months ago ArmRosgazprom Director-General Karen
Karapetyan was appointed a member of the Razdan Power Plant RPP board
of directors from Russia’s Gazprom.

Karen Karapetyan In connection with my appointment as a member of
the board of directors I can say that the Razdan power plant is the
property of the Russian Federation and this country’s government
decided to appoint me as a representative of Gazprom.

No significant changes have been made to the Razdan power plant
management. Simply a new team has been formed which will carry
out management.

Passage omitted: on relations between Gazprom and Russia’s power grid
monopoly Unified Energy System

Gazprom set to take part in Armenia-Iran gas pipeline construction

Correspondent The principle “gas for electricity” is the basis of the
Iran-Armenia gas pipeline project . Given this, can power be exported
outside this project?

Karapetyan It is known that high-voltage power lines are being
constructed between Iran and Armenia. It will give an opportunity to
export more power than that supplied in exchange for the received gas.

Correspondent Will AyRusgasard take part in the construction of the
Armenian sector of the Iran-Armenia gas pipeline?

Karapetyan It is known that the right to construct the Armenian sector
was given to the Iranian party. The latter will soon announce a tender
where we shall also take part.

Correspondent Is Gazprom going to take part in the construction of
the second part of the gas pipeline’s Armenian sector?

Karapetyan Yes, it is. We are waiting for a working delegation to
visit Armenia. After talks with Armenia, a visit by a representative
delegation is expected.

Gas export to Europe impracticable

Correspondent There are rumours that the gas pipeline will go to
Europe. Is it real?

Karapetyan The capacity of the gas pipeline is not of a transit one. A
gas pipeline with the diameter of 700 mm will be constructed, which
will satisfy Armenia’s demand. If we construct a pipeline of bigger
diameter, we shall need bigger investment.

It is also clear that bigger diameter would be profitable for us if
there was demand in third countries’ markets. But today there is no
free space on those markets. The construction of a transit pipeline
demands three times more investment. Moreover, the construction of
a transit pipeline is fraught with numerous problems, and if we do
not resolve them we can hardly find an investor.

Correspondent According to some sources, the Iranian party is
nevertheless aspiring to reach the European gas market. Will they
settle the problems mentioned by you?

Karapetyan There was not such agreement. In 1995-96 when this project
was being prepared, they were speaking about a 700-mm diameter
pipeline. As for reaching the European market, Iran may settle this
problem by means of the existing gas pipelines, let us say those
which pass via Turkey.

Correspondent Exporting Iranian gas via other gas pipelines seems
not to be real as they do not reach Europe. Given this, it is logical
that Iranian gas export projects via Armenia are nevertheless on the
agenda. Will these projects come true in future?

Karapetyan No, not in the near future. First, it should be taken into
account that in case of transit, the Georgian gas pipelines should
be also used, which requires major investment as well. Time for this
topic may come in future.

Nairit’s debt

Correspondent Rumours are being recently circulated that to cover
Armenia’s major chemical plant Nairit’s 8m-dollar debt to AyRusgasard
Nairit’s shares of the same value will be given to the company. Is
this true?

Karapetyan There are no plans in this regard yet. Nairit indeed owes
us 8m dollars, and we are trying to find common ground with this
company’s management.

Passage omitted: Karapetyan on gas supply forecasts; gas supply safety