PM SAYS ARMENIA TO CONTINUE TO RECEIVE RUSSIAN GAS ON PREFERENTIAL TERMS FROM 2009
by Andrew Neff

Global Insight
April 28, 2008

Armenia’s Prime Minister Tigran Sargsian said on Friday (25 April)
that Armenia will be able to buy gas from Russia for less than its
Caucasus neighbours next year, even as Armenia faces a price hike from
Russian gas giant Gazprom. Speaking to reporters, Sargsian said that
Gazprom’s chief executive officer (CEO) Alexei Miller is expected to
visit Armenia next month to discuss a new deal on Russian gas prices
to Armenia. Sargsian said that Armenia, which currently pays just
$110US per 1,000 cm for Russian gas imports under a deal agreed in
2006, is expecting to buy gas fro $165US per 1,000 cm beginning next
year. Sargsian said that the new price is expected to stay constant
for the next three years.

Significance: Sargsian’s comments come as the Armenian government
is removing subsidies on gas prices as of 1 May for all but the
most "at risk" consumers (seeArmenia: 16 April 2008:). As such, his
comments appear designed to placate Armenian consumers facing price
increases, noting that prices for Russian gas imports are even higher
in neighbouring Georgia. Gazprom is bringing the former Soviet states
over to "European" gas prices, although the Russian gas firm locked in
prices for Armenia from 2006 to 2008 as part of a wider deal (seeCIS:
7 April 2006:). Sargsian is anticipating that Armenia will still
benefit from preferential supply terms between 2009 and 2011 that
will allow it to import Russian gas at prices below European levels,
as well as prices at a discount to what Gazprom plans to charge other
former Soviet states.

From: Emil Lazarian | Ararat NewsPress