GAS PAINS FONT SIZE
By Evgeny Morozov : BIO| 10 Apr 2006
TCS Daily, DC
April 10 2006
As of April 1, Moldova and Armenia were to start paying $110-twice the
2005 price-for a thousand cubic meters of gas bought from Gazprom,
the Russian energy behemoth. This was part of Gazprom’s campaign of
fighting “price socialism,” as Aleksei Miller, the company’s CEO,
termed the subsidized sale of Russian gas to countries of the former
Soviet bloc.
What really happened in Moldova and Armenia before, on, and after April
1 proved that Gazprom’s intentions are not grounded in the realms of
free-market thinking, but aim to support the new reconfiguration of
Russian foreign policy, in which the Russian energy base serves as
a powerful way to restore the country’s position in the world. This
reconfiguration surfaced as early as 1999, when President Vladimir
Putin wrote that “Russia’s emergence from its deep crisis and
restoration of its former power” is preconditioned on the state’s
use of the country’s natural resources.
Now, seven years later, the crisis is over; it is restoration time.
This explains why a few days before the April 1 deadline, Moldova
agreed to continue buying Russian gas at the 2005 price for yet
another quarter in exchange for creating more joint projects with
Gazprom. Gazprom already has a majority of 50 percent plus one in
Moldovagaz, the joint Russian-Moldovan venture responsible for gas
shipments of Russian gas to the country. Gazprom has also been trying
to increase its share to 75 percent, and might as well succeed even
by the end of the year.
Armenia chose a different path and accepted the higher price.
However, its government is in talks with Moscow to alleviate the burden
by entering another “property in exchange for debt” agreement, which
would swap the energy debt for a transfer of state-owned property
to Russia (Armenia already used this scheme once; thus, five of its
companies, predominantly in the science and energy sectors, are now
controlled by Russia).
This time, the “exchange” might include the under-construction
Iran-Armenia pipeline and/or the fifth block of the Hrazdan Power
Plant. Without the exchange, the Armenians will have a hard time
coping with the burden of increased gas prices (beginning April 10,
Armenia increases its gas tariff by 52.2 percent for residents, by 85.2
percent for companies, which would have a dire effect on the economy).
Lithuania, which as a member of the EU might be tempted to feel
safer than Armenia or Moldova, faced another Russian take-over of its
Mazeikiu Oil Complex, part of the Yukos heritage in the country. The
bidding process started by the Lithuanian government to sell the
Mazeikiu to foreign investors was hampered on March 29, when the
Moscow Arbitration Court gave a ruling in favor of the state-owned
Rosneft to claim Mazeikiu as part of its campaign to settle the Yukos
“tax arrears” to the state. The situation has been so grave that the
Lithuanian government is considering nationalizing Mazeikiu based on
a threat to national security clause.
Pro-Russia Belarus, which already struck a deal with Moscow over of
gas supplies until 2020, hoped that the same agreement could have been
made about the prices. However, the cunning Kremlin caught Belarusian
President Alexander Lukashenko when he was most vulnerable: amidst
an intensifying protest campaign (with the biggest protest planed
for April 26, the 20th anniversary of the Chernobyl disaster) and
reportedly in bad health (Lukashenko suddenly disappeared for two
weeks and rescheduled his inauguration for no apparent reason).
Now, Gazprom wants what it had been trying to get for almost a decade:
either form a joint-venture or obtain full ownership of the Beltransgaz
pipeline, one of the two pipelines that carry the Russian gas to Europe
through Belarus (the second pipeline is Yamal-Europe, and it is fully
owned by Gazprom, with Belarus only leasing the land on which it is
built). With the North European Gas Pipeline looming on the horizon,
Lukashenko has little bargaining leverage (this pipeline might make
the Beltransgaz route even less relevant). The most likely outcome
in his gas war is that Belarus gives up the Beltransgaz pipeline,
and Russia tries to recapture what it has lost in Ukraine through
the murky deal with RosUkrEnergo.
The growing bonhomie along the Beijing-Moscow axis is also worth
noting. Among the 22 contracts that the 800-member Putin’s team had
signed in Beijing in late March, the most important ones had to deal
with the creation of two natural gas pipelines (each about 1,800
miles long) from Russia to China. This would place Russia at the top
of China’s energy suppliers.
What impact can it have on Europe? In the words of Sergei V.
Kupriyanov, a Gazprom spokesman, “Gazprom will fulfill all its current
contracts and obligations to Europe. However, the future increases
in gas supplies to Europe — in response to its growing demand —
will be subject to arbitrage between China and European countries.”
It appears that Moscow has a grand strategy of pitting Western and
Eastern Europe and Asia all against each other. Judging by the recent
developments in Moldova, Armenia, Lithuania, Belarus, and China, it
might be more disruptive than many in Brussels, Warsaw, or Beijing
are prepared to realize.
The author is a columnist for the Russian newspaper Akzia.
From: Emil Lazarian | Ararat NewsPress

MAMMADYAROV: “OFFICIAL BAKU WILL EXPRESS OPINION OF US LATEST PROPOSALS ON THE CONFLICT SETTLEMENT”
Today, Azerbaijan
April 10 2006
Foreign Minister Elmar Mammadyarov had talks with American co-chair
of OSCE Minsk Group Steven Mann and Assistant Secretary of State for
European and Eurasian Affairs Daniel Fried at the State Department
the day before yesterday.
Mammadyarov also had talks with National Security Adviser Stephen
Hadley in the White House, APA reports.
FM stated that US high ranking officials expressed willingness to
deepen relations with Azerbaijan.
“It meets Azerbaijan’s national interests. The American side approves
President Ilham Aliyev’s prescient strategic policy on the country
as well as on the region,” Mammadyarov said.
“US thanked Azerbaijan for its contributions to the counterterrorism
coalition. Washington considers Azerbaijan as the leader in the
region,” FM added.
The Minister also said that during the talks in the State Department,
the American side put forward some proposals regarding the Prague
process to settle Nagorno Karabakh conflict.
“They are some interesting proposals. The Official Baku will analyze
and express opinion on them during Steven Mann’s visit to the region
April 18,” Mammadyarov said.
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IRAN-ARMENIA GAS PIPELINE TO BE OPERATIONAL DEC. 2006
Tehran Times, Iran
April 10 2006
Tehran Times Economic Desk
TEHRAN – The first phase of Iran-Armenia gas export pipeline is
expected to kick off in early December 2006, technical and foreign
relations director of Armenia Energy Ministry Leon Vartanian announced
on Sunday.
“The project is moving at desirable pace and it is going to come on
stream 30 days earlier than anticipated time,” the Persian service
of ISNA quoted Vartanian as saying, adding that the pipeline is 40
km long within the Armenian territory.
Elsewhere in the news, Iran’s oil minister, Seyyed Kazem
Vaziri-Hamaneh, stated that the country is exporting gas to
Nakhichevan, Azerbaijan Republic, on energy exchange basis and
several other gas export plans to the neighboring countries are
under consideration.
A natural gas sale to Armenia is Iran’s third largest long-term
contract in this sector after the export agreements to Turkey and
UAE. The deal is projected at the daily volume of nine million
cubic meters.

CONDOLEEZZA RICE HAD PHONE TALKS WITH ALIYEV AND KOCHARIAN
Today, Azerbaijan
April 10 2006
The US Secretary of State met Azerbaijani Foreign Minister Elmar
Mammadyarov.
The State Secretary phoned President Ilham Aliyev first and then
Armenian President Robert Kocharian before meeting with Mr.Mammadyarov,
APA reports.
Ms.Rice discussed settlement of the Nagorno Karabakh conflict with
the Presidents.
The talks with the Azerbaijani FM also focused on this problem. The
US State Secretary expressed hope that improvement would be achieved.
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ARMENIA THREATENS TO DROP OUT OF PEACE TALKS
Assa-Irada, Azerbaijan
posted on April 10 2006
Baku, April 7, AssA-Irada
Armenian Foreign Minister Vardan Oskanian made destructive statements
during the recent discussions on the Armenia-Azerbaijan Upper (Nagorno)
Garabagh conflict with his Russian counterpart Sergey Lavrov in Moscow.
Oskanian said the conflict settlement will be specified over the next
two months. He said if official Baku accepts the right of Garabagh
Armenians to self-determination, “Yerevan and Khankandi will be ready
to consider all the issues involved afterwards”. Otherwise, Armenia
will not participate in the talks concerning Azerbaijan’s territorial
integrity and the return of Azeri refugees home, Oskanian maintained.
“Granting Upper Garabagh’s Armenian residents the right to
self-administration should be taken as the main principle. If this
position of ours is not taken as a basis in the negotiating process,
Armenia will not be involved in addressing the problems of the persons
displaced by the conflict,” the Armenian minister alleged.
Russian Foreign Minister Lavrov said the OSCE Minsk Group (MG)
mediation allows the conflicting sides to reach an accord. The
co-chairs are constantly working on proposals on the conflict
resolution that could help the parties to move the peace process
forward, he said.
“We do not disclose the details, as this is not in our authority,
but that of the parties to the conflict. But the Minsk Group has some
proposals that could be deemed as key for the conflict settlement,”
Lavrov said.
While in Moscow, Oskanian also met with the Russian co-chair of the
OSCE MG Yuri Merzlyakov.
From: Emil Lazarian | Ararat NewsPress

ARMENIAN OFFICIAL SAYS AZERBAIJAN OPEN FOR PHONE CALLS
Assa-Irada, Azerbaijan
posted on April 10 2006
Baku, April 7, AssA-Irada
An Armenian official has said that phone calls are made from Armenia
to Azerbaijan.
“It is impossible to call from Azerbaijan to Armenia, but calling
the other way round is very easy. To connect, it is enough to dial
the 994 (area) code and the telephone number,” the head of Armenian
communications ministry’s foreign relations department, Gagik
Grigorian, said, commenting on the Azeri Minister of Communications
and Information Technologies Ali Abbasov’s statement made Thursday.
Abbasov said the government was aware of numerous facts concerning
phone communication between the two countries. He said the National
Security Ministry is monitoring the conversations. It is also working
to oversee the existing electronic communication between Azerbaijan
and Armenia, although it is extremely difficult to control, he said.
Grigorian said that indeed, hundreds of Azeris and Armenians
communicate via different Internet forums every day.
The two countries which are facing a long-standing conflict over Upper
(Nagorno) Garabagh maintain no relations.

ARMENIA ‘READY’ TO HOST AZERI SOCCER MATCH
Assa-Irada, Azerbaijan
posted on April 10 2006
Baku, April 7, AssA-Irada
The Armenian government has invited the Azerbaijani national football
team to Yerevan as part of the European Cup qualification leg, Armenian
Foreign Minister Vardan Oskanian has said in Moscow. He said his
country was ready to create all the necessary conditions for the game.
The minister added that Armenia had already appealed to FIFA, world
football’s governing body, stating that it was prepared to host a
match like that.

GARABAGH TO TOP AZERI-EUROPEAN TALKS
Assa-Irada, Azerbaijan
posted on April 10 2006
Baku, April 7, AssA-Irada
The Azerbaijani delegation to the Parliamentary Assembly of the
Council of Europe (PACE) intends to discuss the Upper (Nagorno)
Garabagh conflict at a meeting with the chairman of the organization’s
subcommittee for the conflict, Lord Russell Johnston, the head of
the Azerbaijani delegation Samad Seyidov said Friday.
The sides are expected to explore ways of applying the PACE resolution
pertaining to the recognition of Azerbaijan’s territorial integrity
to the process of negotiations.
With regard to the session proper, Seyidov said issues concerning
Azerbaijan would not be discussed during the spring session of PACE.
However, human rights, the situation in the army and the plight
of Azerbaijani refugees and IDPs would remain in the focus of the
discussions. The repeat parliamentary elections in ten constituencies
due in May will be tabled at the session of the organization’s
monitoring committee on May 19.

AZERI MINISTER SLAMS ARMENIA OVER ENVIRONMENTAL POLLUTION
Assa-Irada, Azerbaijan
posted on April 10 2006
Baku, April 7, AssA-Irada
The Azeri Minister of Ecology and Natural Resources Huseyn Baghirov
said on Friday that Armenia’s actions hurting the environment
in the occupied Azeri land once again prove the true gist of its
hostile policy against Azerbaijan. This includes felling of trees
and pollution of water basins in borderline areas and rivers going
through the occupied territories.
The ongoing preparation of documents in several languages concerning
the issue will be completed soon. The data will be made public both
in and outside the country, the minister told a news conference Friday.
The trees are felled in the preserve located in the Zangilan district
as well as in other Armenia-occupied territories, for their further
exports to Italy, France, Greece and Iran. The timber is used for
various purposes, including furniture production and shipbuilding.
A prompt response center is operating under the Azeri ecology ministry
to track down the dire impact on the environment and natural resources
in the occupied areas. It has prepared two reports and a plan of
action in this respect. The center has plenty of materials at its
disposal proving Armenia’s destructive influence on these territories.

AIR FRANCE OPENS REGULAR FLIGHTS TO ARMENIA
Today, Azerbaijan
posted on April 10 2006
Air France has begun regular flights between Paris and Yerevan.
According to Russia’s Itar-Tass news agency Airbus A-320 planes seating
159 business and economic class passengers will be used on the route.
Cities in Eastern and Central Europe are Air France’s priority
destinations, Air France Senior Vice President for Europe and North
Africa, Etienne Rachou said.
“Our company tries to keep abreast with the development of our
countries’ relations, contribute to higher economic and tourist
exchanges with Armenia, bearing in mind the large Armenian Diaspora
in France,” he said.
Air France hopes that passengers from Los-Angeles, U.S., where the
largest Armenian Diaspora resides, will guarantee high seat occupancy
rates. The company offers many connection flights across the Atlantic
Ocean.
“This is a strong political message on the eve of the Year of Armenia
in France festival,” French Ambassador to Armenia Henry Cuni said.
The launch of Air France flights to Yerevan “proves that Armenia is
of strategic interest to French investors,” he said.
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