ArmInfo.The unprecedented rise in gas prices in Europe and membership in the EAEU, in theory, open up new opportunities for Armenia in the direction of lowering the existing price for Russian gas. A similar opinion was expressed to ArmInfo by an expert on energy security Vahe Davtyan.
According to the data of the marketplace, on September 15, the price of gas in Europe in the course of trading on the ICE exchange exceeded $ 840 per 1,000 cubic meters. As of 10:07 am, the value of October futures at the TTF hub in the Netherlands reached $ 842.5 per 1,000 cubic meters.
"The problem is that lowering the cost of Russian gas for a member of the EAEU Armenia requires an elementary thing - the Armenian government must understand what energy diplomacy is. Relevant institutions and lobbying bodies are needed to understand, particularly analyze, calculate and predict trends in the energy market. "Without it, energy diplomacy remains an empty expression," the expert said.
Davtyan explains the current situation on European exchanges as the world economy overcomes the shock caused by the coronavirus pandemic and the subsequent paralysis. As well as a significant increase in the influence of the Russian Federation on the European market, including through the formed gas shortage due to the temporary suspension of the operation of the key Yamal-Europe gas pipeline.
Noting that the export price of gas at $ 170 per 1,000 cubic meters is included in the Gazprom budget, the expert emphasized that the sale of gas at current prices will allow the company to receive huge excess profits. This, in turn, creates the possibility of a significant softening of the tariff policy of the Russian company in relation to key and traditional partners. Given the emergence of such a possibility, in the case of Armenia, in Davtyan's opinion, everything depends on the position and steps of Yerevan.
The expert believes that the way out in this direction is Armenia's transition to spot trade in gas, which, however, requires the creation of appropriate exchanges. In this light, Davtyan assesses last year's letter from the Deputy Prime Minister of Armenia Mher Grigoryan to the head of Gazprom Alexei Miller with a request to revise the prices for gas supplied to Armenia as absurd. According to him, Gazprom did not and could not respond to this letter due to the elementary existence of spot gas trading and gas trading based on long-term contracts, which provides for price fluctuations.
"Another problem is the conclusion of gas contracts by Gazprom with Armenia of shorter-term gas contracts than before. So if earlier contracts were concluded for a period of one year, now their terms fluctuate between 3-4 months. And this speaks of distrust towards the Armenian government. Another obstacle on the way to the correct observance of the interests of Armenia is that, as a rule, all gas diplomacy between Moscow and Yerevan is limited to the adoption of a decision by Moscow and the agreement of Yerevan with this decision," the expert summed up.
