GOVERNMENT SEEKS TO INCREASE STAKE IN ARMENIA’S GAS TRANSPORT JV ARMROSGAZPROM
Andrew Neff

World Markets Research Centre
Global Insight
November 10, 2008

The Armenian government is reportedly seeking to increase its stake
in ArmRosGazprom, the gas transport venture with Russia’s Gazprom
and Itera. Prime-TASS reported that Energy and Natural Resources
Minister Armen Moysisyan said on Friday (7 November) that the
government has proposed transferring Armenia’s gas distribution
pipelines to ArmRosGazprom in exchange for new shares in the
company. ArmRosGazprom, the monopoly importer of gas to Armenia,
currently operates the country’s gas distribution system, but does
not own the pipelines. The Armenian government currently has a 17.32%
stake in ArmRosGazprom, while Gazprom has 78.83% and Itera owns 3.85%.

Significance:Moysisyan said that another alternative for the
Armenian government is for the state to inject $20US-25 million in
ArmRosGazprom directly. The government formerly had a 45% stake,
equal to Gazprom’s 45% stake (Itera had 10%), but the Russian gas
giant increased its stake as a result of several gas price deals with
the Armenian government under which Gazprom agreed to freeze prices
from 2006 to 2008, then extend the transition to "market prices"
through to 2011 (seeCIS: 24 September 2008:). Moysisyan said that the
Armenian government will make its proposals to other ArmRosGazprom
shareholders at a shareholder meeting early in 2009.