Russia to control Armenia’s gas
BBC NEWS:
ss/4888012.stm
2006/04/07 14:21:58 GMT
Russia’s Gazprom is to take control of Armenian pipelines and a power
station in exchange for setting gas prices at half of European levels
until 2009.
The move is part of wider plans by the Russian monopoly to seize
access to gas supplies among former Soviet republics.
Russia said it would raise gas prices to $110 per 1,000 cubic metres,
almost double what is it now, but far cheaper than European rates.
Armenia relies on Russia for gas but wants to import gas from
elsewhere.
‘Market monopolised’
Gazprom would be able to control part of a 40km (25 mile) long
pipeline, bringing gas from Iran to Armenia, following this new
arrangement.
The agreement would also allow Russia to export electricity from the
Razdan-5 gas fired power plant.
Armenia is strategically important to Russia in the Caucasus and hosts
a Russian military base there.
Some critics say Russia is using its energy position an economic and
political tool.
“Without any doubt, having the energy market monopolised by one owner
is bad for any economy” said economist Alexander Agadzhanov.
Regional hikes
Gazprom has been trying to raise prices among its neighbours but has
met with fierce opposition.
Attempts by Gazprom to hike gas prices from $50 to $230 per 1,000
cubic metres was rejected by Ukraine.
Gazprom subsequently cut supplies to Ukraine on 1 January 2006 due to
the failure to reach an agreement, worsening relations with the
country.
More recently Gazprom said Belarus, must pay three times more for its
gas supplies in the future.
A close ally of Russia, Belarus was the only ex-Soviet republic not to
experience Russian gas prices last year.
Russia aims to charge $250 per 1,000 cubic metres to all its former
Soviet neighbours in the longer term, matching European levels.
But such a move is likely to cripple countries whose economies rely
heavily on cheap gas prices.