YEREVAN, Armenia — Armenia’s energy minister denied Friday that the impoverished Caucasus Mountain nation had struck a deal with Russia’s state-run gas monopoly to hand it control of part of a new Armenian-Iranian gas pipeline.
OAO Gazprom a day earlier announced that it had struck a 25-year-deal giving Gazprom’s Armenian joint venture ownership rights to the Armenian segment of a planned pipeline bringing Iranian gas to the country and an electricity power generating unit.
Energy Minister Armen Movsisian, said that the pipeline was still under construction and therefore “it cannot be sold.”
He insisted that Armenia had only agreed to transfer control of the country’s Razdan-5 gas-fired power plant for almost US$250 million (euro205 million).
The deal was expected to draw fire from Armenia’s opposition, which has expressed concern over Russia’s already heavy control over the small, landlocked country’s energy infrastructure.
But Movsisian said the proceeds from the deal _ which will give Gazprom the right to export electricity from the power plant unit _ were needed to soften the effect for the population of a doubling in the price of Russian natural gas supplies.
The agreement sets a price for Armenia of US$110 (euro90) per thousand cubic meters of gas up to Jan. 1, 2009, according to a Gazprom statement _ roughly twice what Armenia has paid in recent years.
Armenia earlier had turned over control for its national gas transport system to a Russia-Armenian joint venture, ArmRosGaz, in which Gazprom and an affiliated company control 55 percent.
Gazprom has sharply raised prices recently for Ukraine, Georgia and Moldova, arguing that it is merely ending subsidies to ex-Soviet republics and bringing the rates closer to market prices. The gas giant is the dominant energy supplier in the former Soviet Union, and has sought to take over pipeline networks, power grids and other energy infrastructure in neighboring states.
Critics, including some Western countries, say the Kremlin is using Russia’s energy wealth as a political and economic weapon.
Armenia is Russia’s chief ally in the poor, but strategic Caucasus Mountain region and hosts a Russian military base.
Russia already largely controls the Razdan-5 plant, the country’s main electricity producer, and Armenia is wholly dependent on Moscow for gas supplies.
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