5th UNIT OF HRAZDAN TPP TO BE SOLD TO ARMRUSGASPROM RATHER THAN TO GASPROM

Noyan Tapan
Apr 12 2006

YEREVAN, APRIL 12, NOYAN TAPAN. Contrary to the previously made
statements, the 5th unit of Hrazdan Thermal Power Plant will be sold
not to Gasprom company (Russia) but to its Armenian subsidiary –
ArmRusgasprom, which follows from new reports of Gasprom. There was
a press release on Gasprom’s website on April 11 about a meeting
between Chairman of Gasprom board Alexei Miller and Director General
of ArmRusgasprom Karen Karapetian. The press release in particular
reads: “Gasprom OJSC and the Armenian government on April 6 signed
a 25-year agreenment that specifies the strategical principles of
cooperation in gas energy projects in the territory of the Republic
of Armenia. The document envisages that ArmRusagasprom will take
over the 5th unit of Hrazdan TPP (Hrazdan-5), as well as some
facilities of Armenia’s gas sector from the Armenian government. The
preliminary sale agreements shall be signed until April 14, 2006,
while the transfer of property rights with respect to the indicated
facilities shall take place until January 1, 2007. By the end of
the deal, Gasprom’s stake in ArmRusgasprom’s capital will make a
qualified majority.” Thus, the main mechanism of the deal between
the RA government and Gasprom may be as follows. ArmRusgasprom’s
capital increases to at least 248 mln USD, and the new shares are
acquired by Gasprom. As a result, Gasprom’s stake in ArmRusgasprom
will make a “qualified majority”. (At the moment it is not yet clear
what percentage it will constitute). Gasprom and the RA governemnt
currently have a 45% stake each. With this sum, ArmRusgasprom will
purchase the 5th power unit and other “gas facilities” from the RA
government. It is not also clear what “facilities” are meant, but
it is almost obvious that it may be the Iran-Armenia gas pipeline,
the construction of which is not completed at the present time and,
according to RA Energy Minister Armen Movsisian, it may not be sold,
but it is envisaged to complete its construction by late 2006. NT
failed to receive any comments on the above mentioned press release
of Gasprom from official Armenian bodies.