Kommersant
Today is Mar. 17, 2005 09:50 AM (GMT +0300) Moscow

Armenia Exchanges Electricity for Iranian Gas

//With the Help of Gazprom and RAO UES of Russia

Friendship of nations

Yesterday, Gazprom Deputy Chairman of the Board Alexander Ryazanov promised
the Armenian President Robert Kocharyan during their meeting in Yerevan to
begin the construction of Armenian section of the Iran-Armenia pipeline, so
Razdan thermoelectric power plant could receive Iranian gas. On the same day
RAO UES of Russia Deputy Chairman of the Board Andrey Rappoport promised to
assist in finding means to build the fifth block of the Razdan power plant.
Representatives of two Russian monopolies were supposed to persuade the
Armenian president that Russia would help secure its power supply, in view
of the upcoming visit of President Vladimir Putin to Yerevan.

Iran-Armenia pipeline, length 140 km, including the reconstruction of the
currently functioning Kadjaran-Yerevan pipeline is estimated by $220
million. Armrosgazprom (45 percent owned by Gazprom) became the
subcontractor to construct the 41 km on Armenia’s territory a week ago. Iran
committed to supply Armenia 36 billion cubic meters of gas in the next 20
years.

Yesterday, the parties confirmed the agreement on gas to be directed from
Iran to Razdan power plant in return for electricity according to the rate
of 1 million cubic meters of gas to 3 million kilowatt-hour. Alexander
Ryazanov said that construction in Armenia will begin on April 1. In
response, Kommersant source in Armenian presidential administration said
that Kocharyan suggested Gazprom to finance reconstruction of the gas
pipeline currently active on the territory of Armenia. The possible ways of
Gazprom’s participation in the project are not being publicized.
Nevertheless, it is known that the finances for the whole project ($220
million) have not been drawn yet. Therefore, there remains a possibility
that Gazprom may count on a share in the future property.

Earlier, RAO Chairman of the Board Anatoly Chubais said that the power
holding was looking at the possibility of participating together with
Gazprom in the construction of Iran-Armenia pipeline. That is why
negotiations between the head of the Federal Grid Company and RAO Deputy
Chairman of the Board Andrey Rapport are not accidental. The Federal Grid
Company press service announced yesterday that no concrete decisions had yet
been made.

All offers of the Russian business before Putin’s visit to Yerevan,
scheduled for March 25th, are aimed at convincing the Armenia president of
the fact that Russia will support all large-scale projects that would secure
power supply to the Republic. It looks like in exchange for that the
Russians will want a guarantee of preservation of the military base near
Yerevan, where the Russian military could relocate in case of withdrawal
from Georgia.

A few hours before the meeting with the president, Rapport passed the
technical and economical offer of RAO regarding the construction of the
fifth block of Razdan power plant, completed before March 15, to the Energy
Ministry of Armenia. Razdan power plant produces 20 percent of all Armenia’s
electrical energy. It should be financed by the scheme of project financing,
however, in case of approval of the offer, RAO is willing to help find
investors.

by Artem Erkanyan, Yerevan; Natalya Grib

Russian Article as of Mar. 17, 2005

From: Emil Lazarian | Ararat NewsPress