ARMENIA ADDUCES ARGUMENTS FOR RUSSIAN GAS PRICE

ARKA
May 20, 2008

YEREVAN, May 20. /ARKA/. Armenia’s Prime Minister Tigran Sargsian and
Gazprom President Alexey Miller negotiated on the Russian gas price
in Armenia during the Monday meeting in Yerevan.

The Premier and Gazprom President were guided by the Russian gas
market liberalization projects for the upcoming three years on the
principles of European gas price policy.

During the meeting, Sargsian focused on the competitiveness of
Armenian economy, predictability of gas prices in the country, as
well as gradual price change.

The Prime Minister and Gazprom President stated that ccooperation
in gas sphere is developing very successfully and gas consumption in
Armenia increasing every year, the RA Government’s press service has
told ARKA.

They agreed that the sooner negotiations over the new gas price are
carried out in Armenia the better.

The participants to the meeting said ArmRosGazprom prepares for an
initial public offering (IPO) of its shares. Miller and Sargsian also
discussed regional cooperation issues.

Te Russian gas giant will bring the price for Armenia to the European
level by 2011. The transition will be smooth "given the high level
of strategic cooperation" between the two countries, Gazprom reports.

On March 31, 2006, The Armenian Government and Gazprom signed a 25-year
agreement on gas and energy cooperation. The Russian gas company sells
its gas to Armenia at $110 per 1,000 cubic metres (against former $56)
under the agreement valid until January 1, 2009.

Monopolist in Armenia’s gas supply market, the ArmRosgasprom CJSC
was established in 1997. The company’s capital amounts $580mln. Its
shareholders are the Gasprom OJCS (57.59% of shares), the RA Ministry
of Energy (34.7%) and the Itera Oil and Gas Company (7.71%). -0–