GASPROM RETURNS TO ARMENIA

The Russian monopolist will supply half of country's gas demand.

The issue of indexation of the tariffs on electricity will be raised once more in autumn. Reduction of the dram rate as compared with dollar may lead to increase of the price for 1 kwt/hour of power energy. This is caused first of all by the fact that the Armenian side pays with hard currency for gas. The inevitable fluctuation of prices for gas could become a destabilizing factor if the government of Armenia didn't conclude an agreement with the Gasprom Company. From now on, the Russian monopolist will start the gas supplies to Armenia. The agreement foresees that the supplier has no right to revise the prices till 2005.

June 18, 2003

PanARMENIAN.Net - Up to now the Itera Company was the monopolist deliverer of the gas. From no on, half of the volume of gas necessary for the country will be supplied by Gasprom which has suggested more attractive conditions for partnership. The Itera to which Yerevan has certain commitments will remain in the Armenian market and provide the 50 percent of the demands in gas. Armenia consumes 1 bln 200 mln cubic meters of gas each year. However, in the nearest future volume of gas supplied to Armenia may increase essentially as the Hrazdean thermal power plant, the biggest in the Transcaucasus, will be exploited, and its production is planned to be sold outside the country.

The ArmRosGasprom Company is the side of the concluded deal, the shareholders of which, besides the Armenian government, are the Gasprom and Itera. The decision about the partnership with Gasprom was adopted by the Council of shareholders unanimously. Itera agreed to yield part of the Armenian market. The prices proposed by the Gasprom are not lower than those set by Itera. However, for the Armenian side the point guaranteeing that the tariffs will remain unchanged was more important. This was not foreseen in the agreement with Itera.

Minister of Energy of Armenia Armen Movsisyan said that the concluding of the long-term agreement will provide additional guarantees of stability of prices for gas. There are certain hopes that the agreement with Gasprom will allow to prevent the increase of tariffs on power energy.