By Emil Danielyan
President Robert Kocharian confirmed on Monday that Russia’s state-run Gazprom monopoly will gain a controlling stake in Armenia’s national gas distribution company that will almost certainly own the incoming gas pipeline from Iran.
Gazprom’s board approved and announced on Friday the issuance of additional shares in the ArmRosGazprom (ARG) operator, saying that it will buy all of them and thereby raise its ARG stake from 45 percent to 58 percent.
Kocharian confirmed the information as he met with Russian President Vladimir Putin in the Kremlin. “I would like to immediately inform you that all of our serious agreements on energy projects with Gazprom are entering the implementation phase,” he said in remarks posted on the Kremlin’s website. “Just a few days ago, they were finally approved by the Gazprom board.”
The Armenian government has until now owned another 45 percent of ARG, with the remaining 10 percent belonging to ITERA, a private Russian gas exporter.
There has been no word yet on whether the Russian giant will pay Armenia anything for gaining control of its gas distribution network and further tightening the Russian grip on the Armenian energy sector. All the signs are that the ARG takeover is part of last April's controversial deal that allowed Armenia to avoid a doubling of in the price of gas imported from Russia until January 2009 in exchange for handing over more energy assets to Gazprom.
One of those assets is the incomplete but modern Fifth Unit of the country’s largest thermal power plant located in the central town of Hrazdan. Gazprom initially confirmed but later refuted reports that it will also get hold of the Armenian pipeline from Iran as part of the deal. Armenian officials also denied that.
Nonetheless, Russian control of the first 40-kilometer Armenian section of the pipeline, slated for completion this winter, now seems a forgone conclusion. Prime Minister Andranik Markarian revealed last week Yerevan’s plans to incorporate the pipeline into ARG, saying that “it would be illogical to have two gas distribution networks in Armenia.”
The ARG chief executive, Karen Karapetian, likewise indicated on Friday that his company’s ownership of the pipeline is imminent. “The question is whether the Iran-Armenia pipeline will be a separate enterprise or will be given to ARG,” Karapetian told reporters. “In my view, giving to ARG would be logical.” “ARG has offered to take over that pipeline,” he added.
The pipeline in question was supposed to end Armenia’s strong dependence on Russian gas and other energy resources. Critics say that by placing it under Russian control the Armenian government would only deepen that dependence. Moscow is thought to have already made sure that the pipeline’s diameter is not large enough to allow Iran to export its gas to Georgia and other countries via Armenia.
This and other economic issues apparently topped the agenda of Kocharian’s talks with Putin, who described as “shameful” the fact that Russia is only the third largest foreign investor in Armenia. “I say ‘shameful’ because it is odd that Russia does not occupy the first place in terms of investments in the economy of its strategic partner,” Putin said.
It is not clear if the two men discussed the Kremlin’s controversial blockade of Georgia which is seriously hurting Armenian companies trading with Russia. Meeting with their Russian colleagues earlier this month, senior Armenian lawmakers exposed Yerevan’s frustration with Moscow’s perceived failure to reckon with the interests of its main regional ally in its dealings with the pro-Western government in Tbilisi. Some of the visiting Russian parliamentarians demanded, for their part, that Armenia make a clear-cut “choice” between Russia and Georgia.
However, the Kocharian administration has avoided taking sides in the latest Georgian-Russian confrontation, expressing hope for its peaceful settlement. Parliament speaker Tigran Torosian reiterated those hopes at a meeting with the Georgian ambassador to Armenia, Revaz Gachechiladze, on Monday. According to Torosian’s office, Gachechiladze praised Yerevan’s stance as “balanced and acceptable to the international community.”