By Ruzanna Khachatrian
Prime Minister Andranik Markarian on Wednesday effectively confirmed reports that Russian energy companies are set to gain a controlling stake in a key pipeline which is due to start pumping Iranian natural gas to Armenia next year. Markarian indicated that his government will likely sell the first Armenian section of the under-construction pipeline to ArmRosGazprom (ARG), the Russian-Armenian joint venture that owns Armenia’s gas distribution network.
The 40 kilometer section was reportedly covered by a controversial April agreement that allowed Armenia to temporarily avoid a surge in the price of gas imported from Russia in return for handing over more energy assets to Gazprom, the state-run Russian monopoly. The most important of them is the incomplete but modern Fifth Unit of the country’s largest thermal power plant located in the central town of Hrazdan.
Gazprom initially confirmed but later refuted reports that it will also get hold of the Armenian pipeline from Iran as part of the deal. Officials in Yerevan also denied that.
However, the Yerevan daily “Haykakan Zhamanak” reported last week that the Russians will after all win control of the pipeline through the ARG operator, in which Gazprom and the Russian-owned group ITERA hold 45 percent and 10 percent shares respectively. The remaining 45 percent belongs to the Armenian government. The paper cited a Russian document which presented the takeover as a fait accompli that will be formalized by January 1.
Markarian appeared to confirm the information as he spoke to reporters after his cabinet’s regular question-and-answer session in parliament. “We are not talking about the sale [of the pipeline] as such,” he said. “It’s just that Armenia may invest in the charter capital [of ARG] or we will jointly make investments because it would be illogical to have two gas distribution networks in Armenia.”
Markarian added that Moscow and Yerevan hope to reach agreement on the issue by the time the pipeline comes on stream later this year or early next.
Defense Minister Serzh Sarkisian, who has been actively involved in Russian-Armenian energy dealings, also strongly hinted at the pipeline’s imminent transfer under ARG control. He said he will ask the ARG chief executive, Karen Karapetian, to publicly “explain the situation in great detail.”
The pipeline from Iran was supposed to end Armenia’s strong dependence on Russian gas and other energy resources. Critics say that by putting it under de facto Russian control the Armenian government would only deepen that dependence. Moscow is thought to have already made sure that the pipeline’s diameter is not large enough to re-export Iranian gas to Georgia and other countries.