Agency WPS
What the Papers Say Part B (Russia)
April 7, 2006 Friday

YEREVAN EXCHANGES A PIPELINE FOR GAS

by Alexei Krashakov

Gazprom succeeded in ousting dangerous rivals from Armenia; Armenia
reached agreement with Gazprom yesterday on an acceptable gas price
for the next three years. Yerevan will buy gas from Russia at $110
per thousand cubic meters until January 1, 2009. The Razdan
Thermoelectric Power Plant and the Iran-Armenia pipeline became
bargaining chips in the deal.

Armenia reached agreement with Gazprom yesterday on an acceptable gas
price for the next three years. Yerevan will buy gas from Russia at
$110 per thousand cubic meters until January 1, 2009. As we
predicted, the Razdan Thermoelectric Power Plant and the Iran-Armenia
pipeline became bargaining chips in the deal. Gazprom’s subsidiary
Armgazprom will buy before the end of the year the fifth bloc of the
Razdan Plant and the initial part of the 40-kilometer Iran-Armenia
gas pipeline. It will build the second part of the gas pipeline (197
kilometers long) afterwards.

Gazprom and RAO Unified Energy Systems have finally got what they
wanted all along. In 2005, the Russian companies decided to form a
consortium to participate in the project but were ousted from it as
soon as Gazprom announced that gas tariffs might be raised. The
Armenian leadership chose Iranian companies Sanir and MAR then.
According to Energy Minister Armen Movsisjan, in late 2005 these
companies were told to go ahead with completion of construction of
the power plant and the Armenian part of the gas pipeline. The
Iranian companies were supposed to invest $150 million in the
projects and have them completed within two years.

Needless to say, this turn of events was not what the Russian gas
monopoly wanted. The Iran-Armenia gas pipeline poses a direct threat
to Gazprom, because it could eventually become the principal pipeline
for gas export from Iran to Europe via Armenia, Georgia, and Ukraine.
“That’s theory of course, but Russia could not afford to dismiss it
out of hand,” said Valery Nesterov of Troika Dialog. “Iranian gas
fields constitute a latent threat to Gazprom.” Gazprom made it move
and scored a major victory.

Nesterov maintains that the terms of the deal benefit both Russia and
Armenia.

Source: Nezavisimaya Gazeta, April 7, 2006, p. 3

Translated by A. Ignatkin

From: Emil Lazarian | Ararat NewsPress