Deutsche Presse-Agentur
April 7, 2006, Friday
11:28:26 Central European Time
Russia charges Armenia more for natural gas
Russia Friday announced it was raising the price of natural gas
delivered to Armenia to 110 dollars per 1,000 cubic metres from the
earlier 56 dollars.
The new prices were set by agreement in Moscow with visiting Armenian
Foreign Minister Vardan Oskanyan.
As part of the agreement, Russia guarantees not to raise the prices
again for three years, and will receive in return control of all
Armenian pipeline projects.
A 25-year cooperation agreement also will see Russia invest up to 800
million dollars into the Armenia gas industry, according to estimates
out of Moscow.
Armenia has a strategic importance for Moscow as a possible supply
route for Iranian natural gas.
The Russia gas monopoly Gazprom has raised prices for all the former
republics of the Soviet Union.
At the beginning of year, there was a week-long row with Ukraine,
which refused to accept a price rise to 230 dollars per 1,000 cubic
metres from 50 dollars. A price of 95 dollars was finally agreed.
>From 2007, Moscow will attempt at least to triple prices for close
ally Belarus which currently pays 47 dollars per 1,000 cubic metres.
dpa so mga sc

Agency WPS
DEFENSE and SECURITY (Russia)
April 7, 2006 Friday
ARMENIA MINISTRY OF INTERIOR AFFAIRS HEAD VARDAN OSKANYAN WILL
DISCUSS IN MOSCOW THE STATE OF THINGS IN KARABAKH
An important item of the negotiations agenda for Armenia Ministry of
Interior Affairs Head Vardan Oskanyan in Moscow will be situation
regulation in Nagorny Karabakh. Russian Federation Ministry of
Interior Affairs official representative Mikhail Kamynin stated that
on the eve of Vardan Oskanyan’s business visit to Moscow on April
6-7. The meetings of Armenia Ministry of Interior Affairs Head with
Russian Federation Foreign Affairs Minister Sergey Lavrov and
Security council Secretary Igor Ivanov will take place during the
visit. Besides, the sides will consider meeting of the agreement
terms concerning transport and fuel energy spheres. Opinion exchange
concerning co-operation on the world-level, actions coordination in
international organizations, as well as most important regional
problems will take place.
Source: Information agency “Turan” (Baku), April 4, 2006

Anatolian Times, Turkey
April 7 2006
Armenian Letters From The Euphrates Basin
ELAZIG – Letters of Armenians particularly living in Southeastern
Anatolia region in the recent period of the Ottoman Empire envision
collapse of the empire soon and establishment of an independent
Armenian state with the support of Europe and Russia.
Firat University Lecturer Ergunoz Akcora told A.A correspondent that
the Armenians, who were living freely under the protection of the
Ottoman Empire, were exploited for the political reasons by the
imperialist states, starting as of mid-19th century.
Akcora said Armenians were provoked by western states and Russia to
revolt against the Ottomans. He said the letters which the Armenians
wrote each other were tools for this provocation.
Speaking about the letters, written by the Armenian committee members
of the period, Akcora said, ”letter of Bagos Seferyan, written in
1915 to Nekter Seferyan residing in Bitlis, said ‘be sure that we
will celebrate the next Easter within Armenia’s independence
festivities. There will not be Ottoman Empire anymore.”
”Again in 1914, Bedros Haruntanyan wrote a letter to his father
Varter Haruntanyan living in Bitlis and said, ‘my dear father. This
is my last letter to you. I will join Armenian volunteers to crush
Turks. Armenia will be free and independent,” Akcora said.
Akcora also said Armenians living in Europe and the United States
wrote letters to Armenians living in Anatolia to provoke them. He
added that the letters were evidences proving that Armenians got
financial support from other Armenians by force.
”When taken into consideration those written in those letters, it is
clearly understood that the aim is to incite Armenians to armed
attacks,” Akcora said.

Kommersant, Russia
April 7 2006
Gazprom Takes Over Armenian Energy
Gazprom has reported the signing of a 25-year agreement with Armenia
on strategic partnership in gas projects. Armenian Foreign Minister
Vardan Oskanian is to hand a draft agreement signed in Yerevan to his
Russian counterpart, Sergey Lavrov today. Under the document, Gazprom
takes control over all gas pipeline projects of the country. In
return, Armenia will get the guaranteed volume of gas supplies for
the next 25 years and the fixed gas price of $110 per 1,000 cu.
meters for the next three years.
The visit of the Armenian foreign minister to Moscow is timed to the
Year of Armenia in Russia. Yet, Armenia is set to discuss a more
pressing issue in Moscow – that of gas prices. Gazprom announced last
December an intention to raise gas prices for Armenia to $110 per
1,000 cu. meters from $56. In the end, Moscow offered Erevan a deal
designed to cushion the price blow.
Gazprom and Armenia’s government initialed an agreement on long-term
cooperation in late March, according to the information Kommersant
obtained. Gazprom is to increase its share in Armrosgaz, the joint
venture controlling all gas transportation in Armenia, to 82 percent
from 45 percent. The Armenian government is currently holding 45
percent in the company and 10 percent is owned by Itera. Under the
agreement, Gazprom will bring funds to the Armenian budget which will
make up for the price hike for local customers.
Gazprom officially confirmed that Armrosgaz will buy the 40km-long
portion of the Megri-Kazharan gas pipeline from Iran to Armenia. The
gas main is to be put into operation by the end of the year.
by Ara Tatevosian, Erevan; Alexander Reutov, Nataliya Grib

Interfax News Agency
Russia & CIS General Newswire
April 6, 2006 Thursday 9:11 PM MSK
Armenia to sell 5th unit of Razdan thermoelectric power plant to
Gazprom for $249 Mln
Yerevan April 6
The Armenian government intends to sell the 5th power generating unit
of the Razdan thermoelectric power plant to compensate consumers for
higher gas prices, Armenian Energy Minister Armen Movsisyan told
reporters on Thursday.
The government has decided to sell the Razdan-5 power unit to the
Russian gas company Gazprom for $248.8 million, he said.
The agreement was reached two days ago.
Under the agreement, payment will be made in installments in three
years: $58.8 million in 2006, $70 million in 2007, and $120 million
in 2008, the Armenian government’s press service said in a statement.
The buyer will own part of the land on which the Razdan-5 complex
stands, while the other part will be given to it for permanent use
free of charge.
Gazprom will undertake completion of the construction of the Razdan-5
power-generating unit within two years.
A 140-megawatt turbo-gas unit will also be built, bringing Razdan-
5’s total capacity to 440 megawatt.
Gazprom is expected to invest an additional $140 million in Razdan-
5’s completion, the Movsisyan said.
In case Gazprom fails to meet the terms of the agreement, it will
face tough sanctions, he said.

Agency WPS
What the Papers Say Part B (Russia)
April 7, 2006 Friday
YEREVAN EXCHANGES A PIPELINE FOR GAS
by Alexei Krashakov
Gazprom succeeded in ousting dangerous rivals from Armenia; Armenia
reached agreement with Gazprom yesterday on an acceptable gas price
for the next three years. Yerevan will buy gas from Russia at $110
per thousand cubic meters until January 1, 2009. The Razdan
Thermoelectric Power Plant and the Iran-Armenia pipeline became
bargaining chips in the deal.
Armenia reached agreement with Gazprom yesterday on an acceptable gas
price for the next three years. Yerevan will buy gas from Russia at
$110 per thousand cubic meters until January 1, 2009. As we
predicted, the Razdan Thermoelectric Power Plant and the Iran-Armenia
pipeline became bargaining chips in the deal. Gazprom’s subsidiary
Armgazprom will buy before the end of the year the fifth bloc of the
Razdan Plant and the initial part of the 40-kilometer Iran-Armenia
gas pipeline. It will build the second part of the gas pipeline (197
kilometers long) afterwards.
Gazprom and RAO Unified Energy Systems have finally got what they
wanted all along. In 2005, the Russian companies decided to form a
consortium to participate in the project but were ousted from it as
soon as Gazprom announced that gas tariffs might be raised. The
Armenian leadership chose Iranian companies Sanir and MAR then.
According to Energy Minister Armen Movsisjan, in late 2005 these
companies were told to go ahead with completion of construction of
the power plant and the Armenian part of the gas pipeline. The
Iranian companies were supposed to invest $150 million in the
projects and have them completed within two years.
Needless to say, this turn of events was not what the Russian gas
monopoly wanted. The Iran-Armenia gas pipeline poses a direct threat
to Gazprom, because it could eventually become the principal pipeline
for gas export from Iran to Europe via Armenia, Georgia, and Ukraine.
“That’s theory of course, but Russia could not afford to dismiss it
out of hand,” said Valery Nesterov of Troika Dialog. “Iranian gas
fields constitute a latent threat to Gazprom.” Gazprom made it move
and scored a major victory.
Nesterov maintains that the terms of the deal benefit both Russia and
Armenia.
Source: Nezavisimaya Gazeta, April 7, 2006, p. 3
Translated by A. Ignatkin
From: Emil Lazarian | Ararat NewsPress

Prime-Tass English-language Business Newswire
April 6, 2006 Thursday 1:26 PM EET
X-Sender: Asbed Bedrossian
X-Listprocessor-Version: 8.1 — ListProcessor(tm) by CREN
Greece’s OTE plans to sell 90% in Armenia’s ArmenTel
MOSCOW, April 6 (Prime-Tass) – Greece’s OTE plans to sell its 90%
stake in Armenian fixed-line and mobile operator ArmenTel, Kommersant
business daily reported Thursday, citing OTE’s statement.
OTE has chosen HSBC Bank as its financial adviser for the sale. OTE
did not disclose information on the funds it wants to raise from the
sale or the timeline of the sale.
A source close to ArmenTel told the daily that Russian mobile
operators VimpelCom and MegaFon have showed interest in buying the
stake.
“ArmenTel is a very attractive asset, and if the price is right we
will be interested in buying it,” MTS’ President Vasily Sidorov told
Vedomosti business daily.
ArmenTel is a fixed-line and long-distance monopoly in Armenia. It
also had a monopoly on mobile services until mid-2005. ArmenTel’s
fixed-line subscriber base stands at about 595,000 users and its
mobile subscriber base at about 320,000 users.
K Telecom is Armenia’s other mobile operator controlling about 50% of
the market, Vedomosti said. Armenia’s population amounts to about 3.2
million people.

The New York Times
April 7, 2006 Friday
Late Edition – Final
Armenia to Get a Discount On Russian Natural Gas
By ANDREW E. KRAMER
In a settlement of the latest natural gas dispute in the former
Soviet Union, Armenia will receive natural gas supplies from Russia
at prices well below European averages until 2009. In exchange, it
will surrender a small but crucial section of gas pipeline to Russia.
Armenia will pay $110 for each 1,000 cubic meters of gas, about half
the European average but twice what the country pays now, the Russian
monopoly Gazprom said in a statement on Thursday.
Gazprom in turn will buy a 24-mile section of pipe connecting Armenia
to Iran, which other than Russia is the only plausible source of
energy supplies in the region. Also under the deal Gazprom, through a
joint venture, was granted a concession to build a larger second
pipeline along this route.
In financial terms, the deal is considered small by the usual
standards of the huge Gazprom, but it could have strategic importance
as the company seeks to maintain its dominance in Eurasian natural
gas trading. The gas sales are expected to bring some $187 million
annually.
The pipeline route from Iran through Armenia that Gazprom now
controls with its 24-mile section has been discussed by energy
analysts as a possible export corridor for Iranian gas to Europe.
”Gazprom is strengthening its competitive advantages in the
republics,” Roman G. Elagin, an oil and gas analyst at Renaissance
Capital, a brokerage firm in Moscow brokerage, said.
Armenia, he said, effectively bargained away its future prospects for
energy sources in return for cheaper prices now. ”Gazprom is the
only supplier of gas to Armenia,” he said. ”Armenia could try to
diversify its supply. But with control of this pipeline, Gazprom now
controls the competitors’ supply.”
A spokesman for the Armenian Embassy in Moscow declined to comment on
Thursday.
With the deal, Gazprom, the world’s largest producer of natural gas,
is operating at the intersection of corporate interest and
geopolitics, as it has in demanding price increases from other former
Soviet republics.
Armenia has been a traditional ally of Russia in the Caucasus. Moscow
was seen as favoring Armenia during its war with neighboring
Azerbaijan in the late 1980’s and early 90’s over the independence of
the ethnic Armenian enclave of Nagorno-Karabakh. The war ended in a
cease-fire but no peace agreement; the lingering animosity prevents
Armenia from receiving energy exports of Azerbaijan, an oil-producing
country.
With February’s talks on Nagorno-Karabakh unavailing and diplomatic
efforts in fits and starts, Russia’s support is considered crucial
for Armenia.
That leaves Iran, with the world’s second-largest natural gas
reserves after Russia, as a source of energy for Armenia in addition
to the Russians.
A Gazprom spokesman declined to explain why the company had
negotiated to purchase the pipe section leading from Iran. Gazprom’s
stated policy is to control gas pipelines for the distribution of its
own products. The spokesman, though, said that Gazprom did not intend
to block possible Iranian gas exports.
”Why would we buy a pipe and turn it off?” the spokesman said.
Still, Gazprom’s attempts to control the export pipes of potential
competitors have precedent in earlier deals.
In Ukraine, Belarus and Georgia, Gazprom has leveraged gas prices in
attempts to buy pipelines for its own gas, with partial success only
in Belarus. To the east, in Turkmenistan, Uzbekistan and Kazakhstan,
Gazprom has gained operational control of the main Central
Asia-Center pipeline, and it controls lines crossing Russia, thus
holding blocking power over these potential competitors for exports
to Europe.
From: Emil Lazarian | Ararat NewsPress

RosBusinessConsulting Database
April 6, 2006 Thursday
Foreign investment in Armenia grows
Foreign investment in Armenian economy (including investment made by
banks and state authorities) exceeded expectations in 2005, having
risen by 8.3 percent to USD504.5m compared to 2004. All planned
investment programs were fully implemented, Armenian Deputy Economy
Minister Tigran Davtian told journalists today.
The real economy sector saw a 31-percent increase in investment
(excluding loans from the banks and state authorities) that reached
USD400.4m. Direct investment totaled USD244.4m in 2005, which is 8
percent more than in 2004, the Deputy Minister said. “This sector
ensures growth of all economic indicators, GDP and prospective
exports,” he underscored.
Davtian noted that starting from 1991 total investment in Armenia
reached USD2bn, direct investment accounting for USD1.5bn. He thinks
that the inflow of foreign capital contributes to the country’s
dynamic and stable economic development, ARKA News Agency reports.

Congressional Quarterly
April 7, 2006 Friday
SEAN MCCORMACK HOLDS STATE DEPARTMENT REGULAR NEWS BRIEFING
WASHINGTON, D.C.

STATE DEPARTMENT REGULAR NEWS BRIEFING

APRIL 7, 2006

SPEAKER: SEAN MCCORMACK,
ASSISTANT SECRETARY OF STATE FOR PUBLIC AFFAIRS

[parts omitted]
QUESTION: I was looking for a readout on the Azerbaijan foreign
minister’s meeting.
MCCORMACK: The secretary met with the Azerbaijan foreign minister.
They discussed a number of issues of bilateral interest, both to the
United States and Azerbaijan. They talked about Nagorno- Karabakh.
They talked about economic reform and democratization in Azerbaijan.
The secretary emphasized the importance of respect for human rights
and moving forward on the democratization process in Azerbaijan.
QUESTION: Was there any talk of a visit to the United States by the
president of Azerbaijan?
MCCORMACK: In as much as a visit to the United States by the
president of Azerbaijan might concern the White House, I’ll leave it
to the White House to discuss such visits — potential visits.
QUESTION: Nagorno-Karabakh was the very first initiative that
Secretary Powell dove into when he took office. And I was just
wondering if Secretary Rice had any inclination to become more
involved in mediating the conflict.
MCCORMACK: She actually has been very much involved in this. There
was a recent meeting in (inaudible) France where we had great hopes
that the two presidents, the Armenian and the Azerbaijani president,
would be able to come to some resolution, some agreement on the issue
of Nagorno-Karabakh.
In advance of that meeting, the secretary spoke with both of the
presidents, and she has also been very much involved with Assistant
Secretary Dan Fried, as well as others who have been working to move
this issue toward a resolution.
So she’s certainly up to date on where the discussions stand. We hope
that both sides can in the wake of the talks in France again provide
some renewed impetus to those discussions and come to an agreement
that would resolve this longstanding issue.