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Yerevan Hopes For Lower Russian Gas Price


Armenia - Gazprom Chairman Alexei Miller speaks at a ceremony in Yerevan, 16Apr2015.

The Armenian government will ask Russia’s Gazprom giant to cut the price of its natural gas supplied to Armenia during upcoming negotiations, Energy Minister Artur Grigorian said on Wednesday.

Armenia currently pays $150 per thousand cubic meters of Russian gas imported via Georgia. By comparison, the Russian gas price for Europe stands at around $230 per thousand cubic meters.

The Armenian side and Gazprom were expected to review the tariff late last year. But visiting Yerevan in October 2017, Russian Prime Minister Dmitry Medvedev said the “special price” will remain unchanged until the end of 2018. Alexei Miller, the Gazprom chairman, accompanied Medvedev on the trip.

Grigorian said that Armenian officials and Gazprom executives will start negotiations on a new gas deal in November. “We will do everything to get a gas price that’s lower than the existing one,” he told a news conference.

The minister did not specify the extent of the price reduction that will be sought by Yerevan.

Armenia’s Gazprom-owned gas distribution network cut its retail fees for households and corporate consumers in November 2016, more than two months after Karen Karapetian was appointed as the country’s prime minister. Karapetian managed the network from 2001-2010 and held senior executive positions in Gazprom subsidiaries in Russia from 2011-2016.

He was replaced as prime minister by Serzh Sarkisian in April this year just a few weeks before mass protests brought down Armenia’s former government. The protest leader, Nikol Pashinian, took over as prime minister in early May.

So far the Russian government and Gazprom have given no indications that they are ready sell gas to Armenia at a deeper discount. Some analysts have suggested that with Karapetian no longer in government the Russians could actually raise the existing price.

Gazprom accounts for over 80 percent of Armenia’s annual gas imports. The South Caucasus country also buys gas from neighboring Iran. Officials in Yerevan have for years insisted that Russian gas is cheaper than Iranian gas.

Grigorian revealed that Yerevan is now discussing with Tehran the possibility of a lower Iranian gas price for Armenia. “I think that very soon we will have the final gas price declared by the Iranian side, which will certainly be compared with the price of Russian gas,” he said.

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