By Ruzanna Khachatrian
The Armenian government will not hand over any of its remaining industrial assets to Russia to reverse or scale down a drastic increase in the cost of Russian natural gas supplied to Armenia, Prime Minister Andranik Markarian said on Friday.
Armenia is one of several former Soviet republics that have been affected by gas price hikes announced by Russia’s state-controlled Gazprom monopoly late last year. It was due to pay $110 per thousand cubic meters of gas, or twice as more, starting from January 1. Yerevan still hopes that Moscow will reconsider the decision.
Markarian said that the Russians have so far only agreed not to levy the new tariff until April 1. “But that is not a final agreement,” he told RFE/RL during a New Year’s reception organized by his office. “At the end of this month the presidents of Armenia and Russia will negotiate to find a final solution to this issue.”
Presidents Robert Kocharian and Vladimir Putin are due to meet in Moscow later this month. The gas controversy is thought to have dominated their previous talks held in the Russian city of Sochi a month ago.
According to media reports, Russia wants to broaden its already pervasive control of Armenia’s energy sector in return for not raising the gas price. Another reported option is a Russian gas loan to Armenia that would be repaid with equities.
“We will not take any loans from Russia, there is no question about that,” said Markarian. “They offered a [gas] credit to Ukraine. We have no such desire. If we did, we could borrow from the West and international organizations on much more favorable terms.”
“Nor can we compensate for anything with assets. We would thereby sort things out only for one year. That would not be a fundamental solution,” he added.
Citing government sources in Moscow, the Russian daily “Kommersant” reported on Thursday that “Russia put forth the terms and conditions in the wake of the Sochi meeting that literally shook the Armenian leadership and left it speechless.” The paper said the Russian side is specifically interested in an incomplete but modern thermal power plant located in the central town of Hrazdan as well as Armenia’s entire gas pipeline network.
The Hrazdan plant is currently being completed by a state-owned Iranian company that signed a $150 million investment agreement with the Armenian government last fall. Energy Minister Armen Movsisian has ruled out a sale of the facility to Russia.
Russia already got hold of another big power plant in Hrazdan in 2003 as a result of a swap agreement that settled Yerevan’s $100 million debt to Russia. Its decision to double the price of gas exported to Armenia, its closest regional ally, has been criticized by Armenian politicians and even government officials. Parliament speaker Artur Baghdasarian went so far as to suggest last month that Yerevan should consider demanding financial compensation for the presence of a Russian military base in Armenia.