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[MosJan]

Gazprom\

RUSSIA, ARMENIA AGREE ON NEW GAS PRICE

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Russia’s Gazprom giant and the Armenian government have reached agreement on the new price of Russian natural gas for Armenia set to rise considerably next year, officials in Moscow and Yerevan said on Tuesday. But they would not specify the price hike, saying only that it will not be as sharp as many in Armenia feared. Gazprom already nearly doubled the price of its gas to $110 per thousand cubic meters more than two years ago. However, its cost for Armenian corporate and individual consumers remained virtually unchanged until last May due to a controversial April 2006 agreement that left more Armenian energy assets under Russian ownership. In particular, Gazprom solidified its controlling stake in Armenia’s ARG gas distribution network and paid $249 million for an incomplete but modern thermal-power plant located in the central town of Hrazdan. The Armenian government used the money for subsidizing the domestic gas prices. It ended the subsidies on May 1, triggering a 50 percent surge in the retail prices of gas supplied to Armenian households and business entities. Gazprom announced shortly afterwards that by 2011 Armenia will have to pay for Russian gas at world prices that are currently above $200 per thousand cubic meters. Armenian officials have since been scrambling to minimize the price hike. The issue was high on the agenda of President Serzh Sarkisian’s late May visit to Moscow. The ARG chief executive, Karen Karapetian, visited the Russian capital and met Gazprom’s chairman, Alexei Miller, for the same purpose on Monday. A spokesman for the Russian gas monopoly, Sergei Kuprianov, told RFE/RL that the two men agreed on the new price but refused to disclose it. Kuprianov said only that Gazprom “took into account the allied Russian-Armenian relationship” when deciding how much to charge Armenia in 2009. Karapetian confirmed the information as he spoke to RFE/RL in Yerevan. “There will be a price rise but it will be very pleasant for everyone,” he said, adding that Russian gas will remain “very affordable” for Armenians in the coming years. He did not elaborate. Natural gas is the number one source of winter heating for Armenia’s population. It is also widely used, in liquefied and pressurized forms, by public transportation means and personal cars. (Photolur photo: Karen Karapetian.)
* By Ruben Meloyan and Aza Babayan in Moscow

[MosJan]

NEW RUSSIAN GAS PRICE FOR ARMENIA UNVEILED

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Armenian officials disclosed on Tuesday the new, considerably higher price of Russian natural gas which Armenia will have to pay next year and which will rise further in 2010. The national gas distribution company ArmRosGazprom (ARG) said that under the terms of its agreement signed with Russia’s Gazprom monopoly last week, the gas price will grow from $110 to $154 per thousand cubic meters starting from April 1, 2009. The agreement signed in Moscow envisages the tariff’s gradual increase to international levels, currently exceeding $250 per thousand cubic meters, within the next few years. According to ARG’s chief executive, Karen Karapetian, Gazprom will be charging Armenia $200 per thousand cubic meters from April 2010. President Serzh Sarkisian and top ARG executives downplayed the price hike’s impact on Armenian households and corporate users as they revealed it during a meeting at the Russian-controlled company’s Yerevan headquarters. “The tariffs that will take effect on April 1, 2009 will only slightly increase the socioeconomic burden [of the population,]” Sarkisian said. “I am convinced that the new tariffs will not weigh heavily on the economy,” Karapetian told reporters after the meeting. He said the increased cost of Russian gas, the main source of winter heating for Armenian households, will be mitigated by recent years’ dramatic appreciation of the Armenian dram against the U.S. dollar. Karapetian also stressed the fact that the measure will take effect after the 2008-2009 heating season and therefore spare the population extra spending this winter. Russian gas is also used by local thermal-power plants that general about one third of Armenia’s electricity. Whether they will seek to raise their electricity fees as a result is not yet known. The retail prices of gas in the country already surged by 50 percent on May 1 after the Armenian government stopped subsidizing them with proceeds from a controversial 2006 deal with Gazprom that left more Armenian energy assets under Russian control. The latest tariff deal with Gazprom came amid the nearing completion of work on the second and final section of a gas pipeline linking Armenia to neighboring Iran. Sarkisian announced on September 3 Armenia will be able to import up to 2.5 billion cubic meters of Iranian gas annually “in late October or early November.” Gazprom supplies to Armenia totaled just over 2 billion cubic meters last year. (Photolur photo)
* By Ruzanna Stepanian