Gazprom consolidates 100% of Armrosgazprom
MOSCOW. Jan 17 (Interfax) - Gazprom CEO Alexei Miller and Armenian Energy and Natural Resources Minister Armen Movsisian have signed a purchase-sale agreement for 20% of shares in Armrosgazprom to further an intergovernmental agreement between Russia and Armenia, the Russian gas giant said.
As a result of the deal, Gazprom will increase its interest in Armrosgazprom to 100%. The company will be renamed Gazprom Armenia.
It was reported earlier that the Armenian government was selling a 20% stake in Armrosgazprom to Gazprom as repayment of a $155 million debt for supplied Russian gas.
"Gazprom has been successfully working with its Armenian colleagues in many areas for many years. We have implemented major projects, both in mainline transport and electricity. But most importantly, a major, socially important result was achieved for Armenia - we reached a gasification level of 96%," Miller was quoted as saying in the press release.
"Another important area of our cooperation is natural gas vehicle fuel. The number of NGV fuelling stations in Armenia even exceeds their number in Russia. And we have something to learn from our Armenian colleagues," Miller said.
Armenia does not produce its own natural gas, so the country's electricity sector depends almost completely on gas imports. Gas is shipped by Gazprom Export to the Armenian border, where it is purchased by Armrosgazprom, the only gas supplier in Armenia. The Gazprom group supplied 1.96 bcm of gas to Armenia in 2013.
Armrosgazprom, founded in December 1997, primarily supplies natural gas to Armenia's domestic market. The company transports, stores, distributes and sells natural gas, and handles the overhaul and expansion of Armenia's gas transport system and underground storage facilities.
Gazprom and the Armenian government signed an agreement in March 2006 on the Russian company's participation in gas energy projects in the country for a period of 25 years. Under the agreement, Gazprom increased its stake in Armrosgazprom to 80% through a new share issue, the proceeds of which were used to acquire and build a fifth generating unit at the Hrazdan Thermal Power Plant and gas infrastructure in Armenia.
The fifth 480-MW generating unit at the Hrazdan plant was put into commercial operation in December 2013. The unit had been operating on a trial basis since January 2012, generating more than 2 billion kWh of electricity.
In December 2013, the Russian and Armenian energy ministries signed an intergovernmental agreement on the terms of the purchase-sale and future activities of Armrosgazprom, under which Gazprom's stake in the company would increase from 80% to 100%. In addition, Gazprom and Armrosgazprom signed a contract for the delivery of up to 2.5 billion cubic meters of Russian natural gas to Armenia annually in 2014-2018. The price of the gas will be determined according to a formula linked to Russian gas pricing.
