ARMENIA DENIES RUSSIA DEAL ON IRAN PIPELINE

The Moscow Times, Russia
April 10 2006

YEREVAN, Armenia — Armenia’s energy minister denied Friday that the
impoverished Caucasus nation had struck a deal with Russia’s state-run
gas monopoly to hand it control of part of a new Armenian-Iranian
gas pipeline.

Gazprom a day earlier announced that it had struck a 25-year-deal
giving Gazprom’s Armenian joint venture ownership rights to the
Armenian segment of a planned pipeline bringing Iranian gas to the
country and an electricity power generating unit.

Armenian Energy Minister Armen Movsisian, said that the pipeline
was still under construction and therefore “it cannot be sold.” He
insisted that Armenia had only agreed to transfer control of the
country’s Razdan-5 gas-fired power plant for almost $250 million.

The deal was expected to draw fire from Armenia’s opposition, which
has expressed concern over Russia’s already heavy control over the
small, landlocked country’s energy infrastructure.

But Movsisian said the proceeds from the deal — which will give
Gazprom the right to export electricity from the power plant unit —
were needed to soften the effect for the population of a doubling in
the price of Russian natural gas supplies.

The agreement sets a price for Armenia of $110 per thousand cubic
meters of gas up to Jan. 1, 2009, according to a Gazprom statement —
roughly twice what Armenia has paid in recent years.