Armenia’s Government To Sell Iran-Armenia Gas Line To “Armrosgasprom

ARMENIA’S GOVERNMENT TO SELL IRAN-ARMENIA GAS LINE TO “ARMROSGASPROM”

Yerevan, April 6. ArmInfo-RBC. According to the Gasprom’s press-office
information, the “Gasprom” and the government of Armenia signed an
agreement on the purchase of the 40-km section of the Iran-Armenia
gas line under construction and the Razdan HPP’s Unit N5 (Razdan-5) by
“ArmRosgasprom” CJSC from the Republic’s government. It is envisaged
to sign the preliminary purchase and sale agreement till April 14 and
the final law of property transfer must be carried out till January 1,
2007. According to the agreement, the Armenia’s government also engages
itself to hand over the functions of the Principal of the Iran-Armenia
gas line’s second part construction with length of about 197 km to
“ArmRosgasprom. The government of Armenia aims at assuring the national
energy safety by Iran-Armenia gas line construction at the expense
of gas supply sources diversification. In order to assure efficient
processing of the natural gas into electric energy, the parties will
join their efforts to restore and create a technologically unified
Razdan-5 complex with a common control center, as well as to build
a gas-turbine plant with electric power to 140 MW. Further operation
of these objects will allow to reduce fuel expenses for the electric
energy production. A possibility of export of the Razdan-5 energy
output is fixed in the agreement. Upon completion of the transaction,
the Gasprom’s share in the authorized capital of “ArmRosgasprom”
will made up the qualified majority.

The “ArmRosgasprom” CJSC was created in December, 1997. The
“Gasprom” OJSC and the Armenia’s Ministry of Energy own 45% of
the enterprise’s stocks each, 10% of shares belongs to the “Itera”
Company. The main sphere of “ArmRosgasprom” activity is organization
of the natural gas supply for the Armenia’s internal market. Moreover,
the “ArmRosgasprom” deals with transportation, storage, processing,
distribution and realization of the natural gas, reconstruction and
enlargement of the gas transport system and the gas underground
storages in the republic. The Razdan HPP is the largest one of
Armenia’s energy complex. It’s power is 1,1 thsd. MW, 800 MW of which
is used in winter time. The Razdan HPP was handed over to the RF
ownership in 2003 against discharge of the Armenia’s state debt. The
republic’s government made a decision in 2004 to sell the unfinished
fifth unit of Razdan HPP with power of 300 MW in order to attract
investments for the Armenia’s power system modernization. There is
no own gas production in Armenia, the republic’s power system nearly
fully depends on the gas import. The Gasprom resumed the natural gas
supply to Armenia in June, 2003, and now it is the only gas supplier
to the country. The Company supplied 1,7 bln cub.m. of natural gas
to the Armenia’s consumers in 2005. The “Gasprom” and the Armenia’s
government also signed an agreement, according to which the gas price
is fixed at the level of $110 per 1 thsd. cub.m. till January 1, 2009.