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Gazprom Chief Visits Armenia


Armenia - President Serzh Sarkisian (R) gives a medal to Gazprom Chairman Alexei Miller, Yerevan, 16Apr2015.

Gazprom’s chairman, Alexei Miller, received an Armenian state award from President Serzh Sarkisian on Thursday during a visit to Yerevan that came amid continuing negotiations over the price of natural gas supplied by the Russian monopoly to Armenia.

Sarkisian gave Miller an Order of Friendship in recognition of his “remarkable contribution” to Russian-Armenian economic ties and the work of Armenia’s gas distribution network owned by Gazprom. Sarkisian “highly evaluated” the Gazprom-Armenia network’s track record, the presidential press office said in a statement.

According to the statement, Miller, who is regarded as a key member of Russian President Vladimir Putin’s entourage, thanked the president for the award and presented Gazprom’s “forthcoming programs” in Armenia.

The statement gave no other details. Neither Miller nor Sarkisian spoke to reporters when they broke ground later in the day on a $50 million educational and sporting complex which Gazprom will build in Yerevan.

Energy and Natural Resources Minister Yervand Zakharian said last week that the Armenian government is negotiating with Gazprom in hopes of securing a greater discount on Russian natural gas deliveries to Armenia. “We should succeed,” he said.

Armenia currently pays Gazprom almost $190 million per thousand cubic meters of Russian gas, a price which is well below international market levels. The discount was agreed upon in late 2013 shortly after Armenia decided to join the Russian-led Eurasian Economic Union (EEU).

Zakharian spoke as the Armenian parliament ended three-day heated debates on Russian-Armenian gas dealings and the domestic retail prices of gas. Opposition lawmakers questioned the veracity of financial losses posted by the Gazprom-Armenia operator and said the company’s profit margins are disproportionately large.

The medal awarded by Sarkisian to Miller underscored the government’s rejection of the opposition allegations.

Meanwhile, the head of the Public Services Regulatory Commission (PSRC), Robert Nazarian, said that the ongoing tariff negotiations with Gazprom will determine, in large measure, whether the price of electricity in Armenia will rise soon.

“We will wait until the gas negotiations are over,” Nazarian told RFE/RL’s Armenian service (Azatutyun.am). He declined to give details of the talks.

That the energy tariffs may well go up was again acknowledged by Zakharian on Thursday. “I don’t exclude that,” he said without elaborating.

The PSRC sanctioned a 27 percent surge in the electricity price in July 2013, pointing to the increased cost of Russian natural gas, which accounts for more than one-third of Armenia’s power supply. The state regulator raised the price by another 10 percent in July 2014. It cited the need to end mounting losses incurred by Armenia’s power distribution network owned by another Russian energy giant, RAO UES.

The tariff hikes did not reverse the losses, however. The Electricity Networks of Armenia (ENA) operator currently has over $250 million in outstanding debts to Armenian power plants and banks.

Opposition politicians and other government critics strongly object to the authorities’ apparent readiness to make electricity even more expensive for households and corporate consumers. Vahagn Khachatrian, a senior member of the opposition Armenian National Congress, argued on Thursday that Armenians must not be made to pay what he sees as the ENA’s inefficiency and mismanagement.

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