Saturday, January 12 2019 13:02

ArmInfo. CJSC Gazprom Armenia expects that as a result of negotiations on the size of the tariff margin, solutions will be found that will ensure the normal  operation of the company and the implementation of a reliable and  safe gas supply to consumers.

This is stated in the statement of CJSC "Gazprom Armenia" in response to ArmInfo's question for the possibility of reducing the tariff margin, and, as a result, a  possible reduction in the volume of the company's investment program  due to the rising cost of Russian gas.

"Due to the change in the price of natural gas supplied to Armenia,  discussions are held between the authorized body of the Armenian  government in the energy sector, the regulatory body and Gazprom  Armenia CJSC with the participation of interested public  organizations and relevant specialists with a view to making agreed  decisions on the size of the tariff margin. The tariff margin of the  company must include the indicators necessary for its calculation,  which are included in the structure of tariffs for natural gas sold  by the company to consumers, " the company's statement reads.

According to ArmInfo analysts, new agreements between Gazprom and the  Armenian authorities may lead to a reduction in the margin of Gazprom  Armenia, but will not become critical. However, the partial  cancellation of the discount that Gazprom provided to Gazprom Armenia  to provide investment in development may cause a reduction in the  investment program of the Armenian subsidiary of Gazprom. In  accordance with the draft investment program for 2019-2021, the total  investment is 29,598.4 million drams (excluding VAT). The investment  program of CJSC Gazprom Armenia envisages  the expansion of the  Abovyan underground gas storage station, the construction of new gas  transmission facilities, transport and gas distribution systems, the  acquisition and implementation of modern technology and equipment,  the connection of new subscribers, the installation of security  systems, etc. As previously noted by the company's general director  Hrant Tadevosyan, by 2030 $ 480 million will be invested in the  modernization of the Armenian gas transmission system.

To recall, Gazprom's head Alexei Miller and Acting Deputy Prime  Minister of Armenia Mher Grigoryan signed the supplementary agreement  to the gas supply contract of Gazprom Armenia on December 31 (the gas  distribution organization of the country, 100% from Gazprom). The  price of gas for Armenia on the border with Georgia since the  beginning of 2019 has increased by 10% - to $ 165 per thousand cubic  meters. The agreement of 2016 lowered the price from the same $ 165  to $ 150 per thousand cubic meters.

Gazprom is the only supplier of gas to Armenian consumers. The  republic also receives gas from Iran, but uses it in the form of a  barter deal in exchange for electricity produced in the country. The  contract with Gazprom Armenia was concluded in 2013 for the supply of  up to 2.5 billion cubic meters per year in 2014- 2018. In the first  nine months of 2018, Gazprom exported 1.37 billion cubic meters.