A senior Armenian official on Wednesday revealed the planned sale of a key section of a pipeline transporting natural gas from Iran to Armenia’s national gas distribution network owned by Russia’s Gazprom giant.
The 41-kilometer section runs from the Iranian border to the southeastern Armenian town of Kajaran. The rest of the pipeline completed in 2008 is already owned by the Gazprom-Armenia operator.
Deputy Energy Minister Ara Simonian told RFE/RL’s Armenian service (Azatutyun.am) that the Armenian government and Gazprom have already signed a “tentative agreement” on the sale of the Meghri-Kajaran section. He refused to disclose its financial terms or specify when a final deal could be signed.
A spokeswoman for Gazprom-Armenia, Shushan Sardarian, confirmed this information. Sardarian revealed that the tentative accord was finalized in 2007 with a $30 million “prepayment” made by the company at the time. She said that Gazprom-Armenia will likely pay another $9 million to complete the takeover.
Simonian argued that such a takeover will make an economic sense because the Gazprom subsidiary already owns Armenia’s practically entire gas infrastructure. “We believe that private companies are much better than the state at managing such energy facilities,” he said.
The Iran-Armenia pipeline was constructed with the aim of easing Armenia’s heavy dependence on Russia for energy resources. Critics have long said that Gazprom could exploit its control over the Armenian gas infrastructure to minimize the importance of that alternative source of gas supplies.
Armenia imports roughly 2 cubic meters of Russian gas each year, compared with only 500 million cubic meters supplied by Iran. The Iranian gas is mainly delivered to a thermal-power plant in Yerevan which pays for it with electricity supplies to the Islamic Republic.
Simonian insisted that Gazprom-Armenia will not be able to sabotage gas imports from Iran after buying the Meghri-Kajaran section. He argued that under the terms of its operating license issued by the Armenian government the company is obliged to ensure unfettered transport of gas through its pipeline network.
The vice-minister also stood by government assertions that the Iranian gas will be more expensive than the gas supplied by Gazprom if Armenia increases its imports and pays for them in cash, rather than through the existing barter arrangement.
Armenia currently pays Gazprom $165 per thousand cubic meters of Russian gas. The Russian giant charges European countries more than $300 per thousand cubic meters.