Friday, 07 April 2006

DETAILS OF RUSSIAN-ARMENIAN GAS AGREEMENT REMAIN UNCLEAR

Published in News Digest

By empty (4/7/2006 issue of the CACI Analyst)

In an April 6 statement, Russia\'s state-owned Gazprom announced that under an agreement finalized with Armenia, it will gain control of the export pipeline currently under construction to provide Armenia with gas from Iran, RFE/RL\'s Armenian Service reported. Gazprom said it will take possession of the first, 40 kilometer section of that pipeline this autumn, and that the ArmRosGazprom joint venture will be awarded the right to build the second, 197-kilometer section. But a senior Armenian government official told RFE/RL on April 5 that the deal with Gazprom, under which that company is to receive the fifth unit of the Hrazdan thermal power plant, does not entail yielding control of the export pipeline from Iran.
In an April 6 statement, Russia\'s state-owned Gazprom announced that under an agreement finalized with Armenia, it will gain control of the export pipeline currently under construction to provide Armenia with gas from Iran, RFE/RL\'s Armenian Service reported. Gazprom said it will take possession of the first, 40 kilometer section of that pipeline this autumn, and that the ArmRosGazprom joint venture will be awarded the right to build the second, 197-kilometer section. But a senior Armenian government official told RFE/RL on April 5 that the deal with Gazprom, under which that company is to receive the fifth unit of the Hrazdan thermal power plant, does not entail yielding control of the export pipeline from Iran. Armenian Energy Minister Armen Movsisian similarly told journalists on April 6 that the pipeline \"has not yet been built, there are no shares in it, and it therefore cannot be sold.\" And on April 7, Gazprom amended the statement on its website to remove any reference to its acquisition of the pipeline from Iran, RFE/RL\'s Armenian Service reported. A separate Armenian government statement on April 6 said Gazprom will pay a total of $248.8 million for the Hrazdan facility, of which almost $189 million will be paid in natural gas to be supplied between now and the end of 2008. According to Movsisian, that agreement will translate into a price increase for Armenian households of only 10 percent. Opposition parliament deputy Stepan Zakarian (Artarutiun) criticized on April 6 as \"a serious mistake\" the reported ceding of the Iran pipeline to Gazprom, while parliament deputy speaker Tigran Torosian called on Prime Minister Andranik Markarian to provide a formal explanation for the government\'s U-turn on yielding further assets to Russia. (RFE/RL)
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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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