Energy Minister of Armenia: For Armenia importing gas from Russia is favorable rather than from Iran

 Russian gas is more favorable for Armenia than the Iranian one from a commercial point of view, Ministry of Energy and Natural Resources of Armenia Armen Movsisyan told media, Wednesday, when commenting on the question about the Iranian gas as an alternative to the Russian one.

He said that Iran-Armenia gas pipeline was built to ensure reliable and stable gas supply to Armenia in force-majeur situations, but not to satisfy wide demand for gas in the country. The minister recalled that Armenia pays for the Iranian gas with electric power - 3kWh per/ 1 cu m.

"Iran-Armenia gas pipeline was built for a limited volume of electricity barter. We have no sufficient electric power production capacities, up-to-date and effective power plants and power transmission line to cover the entire demand for gas in Armenia via barter. Therefore, from a commercial point of view, the Iranian gas cannot be more favorable for Armenia than the Russian gas. In addition, Iran sells gas for a higher tariff than Gazprom offers Armenia," the minister said.

To recall, Armenia increased import of gas from Iran by 6% in 2012 to 488.3 mln cu m versus 460 mln cu m in 2011. In 2010 the country imported 400 cu m of Iranian gas.  Gas is supplied to Yerevan

Thermoelectrocentral CJSC in exchange for electricity - 1cu m of gas per 3kWh electricity. Under a relevant agreement, Iran can supply up to 1.1 billion cu m of gas to Armenia (nearly 3 mln cu m daily), and up to 2.3 bln cu m starting 2014. Armenia was to supply surplus electricity to the neighboring Turkey and Georgia, but the country has not yet supplied electric power to those countries. In addition, Armenia purchases not large volumes of cheap electricity from Georgia in specific seasons.

Armenia imported 2455.5 mln cu m of gas in 2012 in total versus 2069.10 million cu m in  2011. Import from Russia totaled 1967.2 mln cu m versus 1609.06 mln cu m in 2011.  The sole supplier of gas to Armenia is ArmRusgasprom CJSC. Gazprom OJSC holds an 80pct stake in the company, with the remaining 20pct belonging to the government.  Following the rise of the Russian gas tariff for Armenia from the current $180 per 1,000 cu m to $270, ArmRusgasprom applied to the Public Services Regulatory Commission for increasing the gas tariff for the population by 67.4% - from the current 132,000 drams to 221,000 drams per 1000 cu m, and for the large consumers by 61.3% - from $243 per 1000 cu m to $392.