Armenia Says Russian Gas Price Hike Won't Disrupt Relations

Gas pipelines in Ukraine (file photo) (ITAR-TASS) 16 January 2006 -- Armenian Foreign Minister Vartan Oskanian said today a possible increase in the price Armenia pays for Russian natural gas deliveries would not upset what he described as the "strategic partnership" between the two countries.

Under a preliminary deal, Armenia has agreed to pay double what it pays now for Russian natural gas starting 1 April. Armenia's prime minister has said Yerevan still hopes to secure better terms.

Foreign Minister Oskanian made his comments at a joint news conference in Yerevan today with visiting Georgian Foreign Minister Gela Bezhuashvili.

Bezhuashvili said Tbilisi considers Russia's decision to raise gas prices for Georgia "[solely] political" and added that Georgia will look at options to diversify its gas supplies in the future.

(Interfax, ITAR-TASS, Mediamax)

Gas Facts

Gas Facts

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• Ukraine consumes 70 billion cubic meters (bcm) of gas per year. It produces 20 bcm of its own gas, has a signed contract to import 40 bcm from Turkmenistan, and in 2005 was getting 29 bcm from Russia as payment for transit of Russian gas.
• Ukraine sells some 7 bcm of gas a year to the West and places some in underground storage facilities. These facilities can hold 34.5 bcm.
• Ukraine is the sixth-largest consumer of gas in the world and uses more gas than Poland, the Czech Republic, Hungary, and Slovakia combined.
• Russia has proven gas reserves of 47 trillion cubic meters (tcm) -- the largest in the world ahead of Iran and Qatar.
• Russia sells approximately 160 bcm to Europe each year. By 2015, Europe is expected to import 300 bcm, or 40 percent of its projected needs from Russia.
• Russia's Gazprom is the world's largest gas company. It is the only company allowed by Russian law to export gas outside the borders of the CIS. It also owns the gas-transportation system and most of the gas fields in Russia.
• The Russian state is Gazprom's majority shareholder , with a 51 percent share. The company's ownership rights changed as of the beginning of 2006, with Gazprom stock being sold on the open market. The Russian state, however, will continue to hold the majority stake.