Gazprom to gain controlling stake in Iran-Armenia pipeline

Mon, 11 December 2006

ARMENIA’S President Robert Kocharyan confirmed recently that Gazprom will gain a controlling stake in Armenia’s national gas distribution company that will almost certainly own the incoming gas pipeline from Iran. Gazprom’s board approved and announced the issue of additional shares in the ArmRosGazprom (ARG) operator, saying that it will buy all of them and thereby raise its ARG stake from 45% to 58%.

Mr Kocharyan confirmed the information as he met with Russian President Vladimir Putin in the Kremlin. The Armenian government has, up to now, owned another 45% of ARG, with the remaining 10% belonging to Itera, a private Russian gas exporter. There has been no word yet on whether the Russian giant will pay Armenia anything for taking control of its gas distribution network and further tightening the Russian grip on the Armenian energy sector. However, all the signs are that the ARG takeover is part of last April's controversial deal that allowed Armenia to avoid a doubling of the price of gas imported from Russia until January, 2009, in exchange for handing over more energy assets to Gazprom.