GAZPROM TO INCREASE GAS PRICES FOR ARMENIA

Earthtimes.org
Energy Watch
Sept. 14
Washington

Russian gas giant Gazprom plans to gradually raise prices for natural
gas supplied to Armenia, Valery Golubev, Gazprom deputy chairman and
chairman of the board at ArmRosgazprom, told reporters Wednesday.

"Raising prices abruptly would destroy the economy.

They will grow as the economy grows," Golubev was quoted as saying
by Russian financial newswires.

Golubev said Russia is to a significant extent subsidizing gas prices
for Armenia. The price per 1,000 cubic meters is $110, far below the
market price. Most of Europe pays near $230 for 1,000 cu m of gas.

He said only Belarus pays less for gas, but the price for Belarus will
grow to $130 per 1,000 cu m next year. The price in Russia will grow
as well and will reach $150 per 1,000 cu m by 2011. Gas prices for
Armenia will increase in 2009, he said, but did not indicate how much.

Natural gas prices are subsidized through the sale to Gazprom of the
fifth block of the Razdan Heat and Power Plant for $248.8 million.

He said $188 million was used to subsidize domestic gas consumers
until Dec. 31, 2008.

Golubev said the level of gasification in Armenia is one of the
highest in the world and surpasses even Russia.