By Aza Babayan in MoscowRussia’s Gazprom monopoly confirmed on Tuesday reports that it has offered not to double the price of natural gas supplied to Armenia in return for acquiring a big thermal power plant located in the central town of Hrazdan.
Denis Ignatiev, a spokesman for the state-controlled energy giant, told RFE/RL that this is one of the proposals made by the Russian side during the ongoing negotiations with the Armenian government. He said their acceptance would almost certainly spare Armenia the need to pay $110 per thousand cubic meters of Russian, or twice as more as it has paid until now.
Officials in Yerevan say Gazprom has agreed to delay the enforcement of the new tariff until April 1, pending the outcome of the negotiations. The presidents of the two countries are expected to try to reach a mutually acceptable solution when they meet in Moscow next week.
Ignatiev said Moscow has indeed offered to extend a multimillion-dollar loan to Armenia which would be spent on covering the extra cost of its gas. The loan would presumably be repaid with fresh handovers of Armenian industrial facilities, notably the Hrazdan plant which is incomplete but quite modern.
The idea was rejected by Prime Minister Andranik Markarian on Friday. “We could borrow from the West and international organizations on much more favorable terms,” he argued.
The power plant in question is currently being completed by a state-owned Iranian company that signed a $150 million investment agreement with the Armenian government last fall. It is due to generate electricity with Iranian gas that will be delivered to Armenia through a pipeline currently under construction. Energy Minister Armen Movsisian said on Monday that work on the first Armenian section of the pipeline is proceeding ahead of schedule and will likely be complete by the summer of 2007.
Russia, currently Armenia’s sole gas supplier, is believed to be uneasy about the project. According to the Gazprom spokesman, one of the Russian proposals deals with the planed Iranian gas deliveries. He refused to elaborate.
Russia’s presence in the Armenian energy sector is already pervasive, with Russian energy giants owning most of the country’s gas infrastructure, electricity distribution network, several hydro-electric stations and another big thermal plant located in Hrazdan. In addition, a state-owned Russian utility manages the finances of the nuclear power plant at Metsamor.