GAZPROM TO CONTROL ARMROSGAZPROM, PIPELINE

New Europe, Greece
April 11 2006

Russian gas giant OAO Gazprom and the Armenian government have
signed a strategic agreement for 25 years, establishing the strategic
principles for cooperation in gas-energy projects in the republic,
the Russian company said in a statement. The agreement fixes the price
for Russian natural gas for Armenia at USD 110 per 1,000 cubic metres
until January 1, 2009. The document also deals with the acquisition by
ArmRosGazprom from the Armenian government of a 40-km section of the
Iran-Armenia pipeline, currently under construction, and the fifth
power-producing unit at Razdan thermal power plant.

Also, according to the agreement the Armenian government is obliged
to give ArmRosGazprom the function of client for the 197-km second
section of the Iran-Armenia gas pipeline. Preliminary purchase and
sales agreements should be signed by April 14, 2006 and the final
transfer of right of ownership for these assets should be carried out
by January 1, 2007. “To ensure the effective conversion of natural
gas into electricity, the sides will join efforts to restore and
set up a technologically integrated property complex at Razdan-5,
with a single control centre, and also to build a gas turbine unit
with a capacity of 140 megawatts. These units will make it possible
to reduce fuel expenditure on electricity production. The agreement
also contains the possibility of exporting electricity produced at
Razdan-5,” the statement said.