A senior Iranian diplomat on Friday again called into question the Armenian government’s claims that Armenia buys the bulk of its natural gas from Russia because it is much cheaper than Iranian gas.
The official price of Russian gas for Armenia was set at almost $190 per thousand cubic meters recently after President Serzh Sarkisian unexpectedly decided to make his country part of a Russian-led customs union. The Sarkisian administration says that this concessional tariff is one of the factors that necessitated its foreign policy U-turn.
Energy and Natural Resources Minister Armen Movsisian on Thursday again dismissed suggestions that Armenia could have imported cheap gas from neighboring Iran. Movsisian claimed that the price of the gas currently “offered” by the Iranian side exceeds $400 per thousand cubic meters.
Mohammad Reisi, the Iranian ambassador in Yerevan, appeared to deny this as he held his second news conference in four days. Asked whether Iranian gas is indeed more expensive than the gas supplied by Russia’s Gazprom conglomerate, he said, “One needs to negotiate first, and only during the signing of a supply contract would it be clear which gas is more expensive.”
“Having said that, a country may sell gas to another country for $400 but be willing to charge a third country only $100. That depends on agreements between them,” Reisi stressed, hinting that Iran might have offered Armenia such a discount.
The envoy insisted in that regard that the Armenian government has never sought to officially negotiate with Tehran over more large-scale gas supplies. He said earlier this week that the Iranian government stands ready to significantly increase the current supply volumes.
Armenia began importing Iranian gas following the construction in late 2008 of a pipeline connecting the two countries. According to Armenian government data, Iranian gas deliveries totaled roughly 500 million cubic meters last year, compared with almost 2 billion cubic meters purchased from Gazprom.
The Iranian gas is swapped for electricity generated at a thermal power plant in Yerevan and exported to the Islamic Republic. In a report released last month, the Armenian customs service put the monetary value of that gas at around $182 million per thousand cubic meters, meaning that it is technically cheaper than the Russian gas. The report thus raised more questions about the credibility of Movsisian’s claims.
The pipeline from Iran was supposed to ease Armenia’s heavy dependence on Russia for energy resources. Critics have for years accused the authorities in Yerevan of failing to make use of the alternative source of gas which few other former Soviet republics dependent on Russia have. The Iranian ambassador’s statements will give them more ammunition to attack the government.
“I think it is obvious to everyone that the Armenian authorities need the Russian government’s permission to negotiate with Iran on gas supplies. They don’t have that permission,” said Hayk Gevorgian, a senior economics writer for the pro-opposition daily “Haykakan Zhamanak.”
Analysts believe that greater Iranian gas imports are also hampered by the fact that Armenia’s gas distribution network is owned by Gazprom. The Sarkisian government raised the Russian giant’s share in the network from 80 percent to 100 percent in a controversial deal that was signed during Russian President Vladimir Putin’s visit to the country on Monday.