Russian gas concern to take part in building Iran-Armenia pipeline

Pravda, Russia
July 20 2004

Russian gas concern to take part in building Iran-Armenia gas

President of Armenia Robert Kocharyan and a delegation of the Russian
Gazprom gas concern headed by deputy chairman of the board Alexander
Ryazanov discussed on Monday the building of Iran-Armenia gas

The press service of the Armenian president reported that the sides
also discussed the current state of gas supply to Armenia and the
promising programes in this sphere.

Kocharyan expressed satisfaction over the present level of Armenia’s
cooperation with Gazprom.

It was pointed out that the ArmRosgazprom company intensifies its
activity from year to year, and the gasification rates and the number
of clients are growing in the republic.

The Armenian-Russian enterprise ArmRosgazprom is the only supplier of
the Russian natural gas to Armenia. The company was created in 1997
by Gazprom and the Armenian energy ministry which have 45% of shares
each, and the international group of companies ITERA (10% of shares.)
The authorized capital of ArmRosgazprom is $270 million. In 2003 the
ArmRosgazprom had 186,000 clients.

After his meeting with the Armenian president Ryazanov told
journalists that the construction of the Iran-Armenia gas pipeline
will cost $140 million.

“It is now necessary,” he said, “to choose the sources of financing,
and if they are determined no problem will appear in connection with
the building of this pipeline.”

Ryazanov also pointed out that they can be either state credits or
the means of Gazprom.

At the same time the deputy chairman of the board of Gazprom ruled
out the possibility of the transit of the Russian gas via the
territory of Armenia to third countries since “Armenia is not a
transit country but a consumer, and the Iranian gas pipeline will
satisfy Armenia’s gas requirements for energy and transport needs.”

On May 13, 2004 Armenia and Iran signed a treaty on deliveries of
Iranian gas to Armenia for 20 years. During this period of time the
republicwill receive from Iran 36 billion cubic metres of gas in
exchange for the Armenian energy.