On working meeting between Alexey Miller and Karen Karapetyan
The Gazprom Headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company’s Management Committee and Karen Karapetyan, Chairman of the Board of ArmRosgazprom.
Within the meeting the parties highly evaluated the signing of the new contract for gas supply to Armenia. The contract stipulates a gradual increase in the gas price between 2009 and 2010. The increase is driven by the fact that besides purchasing gas to Armenia, Gazprom, being ArmRosgazprom’s major shareholder, also deals with gas transmission and marketing in the Republic. Taking into account a high level of cooperation with Armenia, Gazprom is interested in strategic development of the Armenian gas market. Upon completion of the third phase of the investment stage in ArmRosgazprom Gazprom will obtain a qualified majority in the company’s equity capital.
Alexey Miller and Karen Karapetyan also discussed transition by Armenia to the pricing formula principles corresponding with the European ones. The new gas price in Armenia, as well as in Russia, will be effective since 2011.
Armenia does not produce natural gas and the country’s power generation sector is totally reliant on gas imports.
Gazprom resumed natural gas deliveries to Armenia in June 2003 and, at present, is the only supplier of gas to the Republic. Gas is delivered to the border with Armenia by Gazprom export (Gazprom’s wholly owned subsidiary); at the border gas is purchased by ArmRosgazprom. Over 2007 Gazprom provided Armenian consumers with 2.05 bcm of natural gas.
On March 31, 2006, Gazprom and the Government of the Republic of Armenia signed a 25-year Agreement identifying the strategic principles of cooperation in the gas and power projects in the Republic of Armenia. Pursuant to the Agreement, until January 1, 2009, the price of Russian natural gas for the Republic of Armenia is USD 110 per 1,000 cu m. The Agreement stipulates ArmRosgazprom’s acquiring from the Armenian Government the fifth power generating unit of the Razdan CHP (Razdan-5) and a range of gas facilities in Armenia. Upon the results of the project’s investment stage Gazprom will have a qualified majority in ArmRosgazprom’s equity capital.
ArmRosgazprom was incorporated in December 1997. Gazprom, Armenia’s Energy Ministry and ITERA owned 45, 45 and 10 per cent respectively in the company. Gazprom’s share in ArmRosgazprom has grown to 67.94 per cent within the implementation of two out of the three planned phases of the investment stage of the project (after the acquisition of additional shares in ArmRosgazprom in November 2006 and April 2008).
ArmRosgazprom’s major business is natural gas supply to the Armenian domestic market. In addition, the company transports, stores, processes, distributes and sells natural gas, as well as upgrades and expands gas transmission and underground gas storage systems in the Republic of Armenia.