United Press International (UPI)
April 7 2006

Russia’s Gazprom to take control of Armenian pipeline

MOSCOW — Russian gas giant Gazprom will take control of Armenia’s
pipelines along with a power station in exchange for lower gas prices
until 2009.

The price of gas is being nearly doubled from $56 per 1,000 cu.m
to $110 dollars per 1,000 cu.m. until 2009 under Thursday’s deal, but
that is still far lower than what most European nations pay for
Russian gas.

In return, Gazprom can control part of a 25-mile-long pipeline
that brings gas from Iran to Armenia. Russia can also export
electricity from the Razdan-5 gas-fired plant.

In Moscow Thursday, Armenian Foreign Minister Vardan Oskanyan
said the increase may have political consequences in his country.

“The increase in the price of Russian gas in Ukraine has had
political consequences,” he said. “I think this is also possible in
our country.”

A standoff between state-owned Gazprom and Ukraine early this
year resulted in the company turning off the taps to Ukraine,
affecting supplies to the rest of Europe, too.

Russia is Europe’s top provider of gas.