The Armenian government has ceded its remaining 20 percent share in the domestic natural gas distribution network to Russia’s Gazprom monopoly in a deal that was announced during Russian President Vladimir Putin’s visit to the country on Monday.
The Gazprom chairman, Alexei Miller, made the announcement from the central Armenian town of Hrazdan where he inaugurated a newly built thermal power plant belonging to the state-run Russian energy giant. “Today is a historic day,” Miller declared in a video conference with Putin, who was visiting another Armenian town, Gyumri. He said the deal will be formalized later in the day.
“Gazprom is becoming the owner of 100 percent of ArmRosGazprom (ARG), and ArmRosGazprom is entering the friendly family of Gazprom subsidiaries,” added Miller.
Armenian Energy and Natural Resources Minister Armen Movsisian confirmed the information in Yerevan hours later. Movsisian told RFE/RL’s Armenian service (Azatutyun.am) that the government decided to sell its minority stake in payment of its $155 million debt to Gazprom. He did not clarify when and how the hitherto unpublicized debt was incurred by the Armenian side.
Movsisian said the deal will also serve as an additional incentive for Gazprom to continue supplying natural gas to Armenia at the current price of almost $190 per thousand cubic meters, which is well below the international market levels.
Speaking after talks with President Serzh Sarkisian, Putin confirmed that the Russian gas tariff will not rise by around 30 percent as planned because of Armenia’s decision to join the Russian-led customs union.
Movsisian indicated last month that a gas deal will be part of a forthcoming “roadmap” to Armenia’s accession to the union. A senior Russian official said earlier that the roadmap is likely to be approved in December.
Gazprom's average gas price for Europe currently stands at roughly $375 per thousand cubic meters, down from an average $400 in the January-May 2013 period.