Thursday, December 14 2017 14:01
Naira Badalian

The Armenian government strengthens the monopoly of the Russian gas giant in the Armenian market

The Armenian government strengthens the monopoly of the Russian gas giant in the Armenian market

ArmInfo. The Armenian government transfers to Gazprom Armenia CJSC a free gas distribution network worth 1.27 billion AMD (about $ 2.6 million). The relevant decree was adopted at a Cabinet meeting on December 14.

As stated in the justification document, Gazprom Armenia will be provided with the Meghri high-pressure gas pipeline, a set of devices and apparatus for the gas distribution station, small gas pipelines in the city of Meghri, as well as a gas distribution network in the city of Agarak, etc. "Given the importance of gasification of these territories, we consider it necessary to transfer the property of the gas distribution network to gratuitous use of CJSC "Gazprom Armenia" for an indefinite period," the document says.

In December 2016, the Armenian government announced the completion of the construction of a gas distribution network of the Meghri and Agarak city communities bordering Iran with the Memorandum of Understanding signed on December 23, 2011 in accordance with the Memorandum, the Iranian side provided Armenia with a grant of $ 2 million for the implementation of the project.

The Armenian side, in turn, exempted companies from paying customs duties and other obligatory payments, which were engaged in the supply of goods, equipment and services. On December 26, 2011, an agreement was signed between the Ministry of Energy Infrastructures and Natural Resources of Armenia and the Iranian company Sinerji, according to which the company was approved as the general contractor of the project. On August 26, 2013, the obligations of the customer were assigned to Gazprom Armenia.  The work on gasification of the cities of Meghri and Agarak has been completed for the allocated funds, as they say in the justification report, their total book value was 1.27 billion AMD.

Thus, Gazprom Armenia, without investing a single penny in the gasification of the Meghri region, was able to manage the region's gas transmission system. Moreover, having secured the role of the first violin in the orchestra for the Russian Gazprom, the Armenian government negates all hopes that the Armenian side will ever decide on the tariff for natural gas coming to the republic. Iranian gas, if ever will be supplied to the local market, will then be controlled by Gazprom.

At present, Russia is the main supplier of natural gas to Armenia, supplied by transit through the territory of Georgia. According to the indicative balance sheet annually approved between the parties, the Russian Federation without customs clearance delivers to Armenia about 2-2.5 billion cubic meters of gas per year. Gazprom Armenia is a 100% subsidiary of PJSC Gazprom, ensuring the supply and sale of natural gas in the domestic market of the republic. As part of the gas transportation system (GTS) is served 1,685 km of main gas pipelines and gas pipelines-bends. As part of the gas distribution system, 14,600 km of high, medium and low pressure gas pipelines and auxiliary facilities are currently serviced.

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