Thursday, December 23 2021 17:59

ArmInfo. After almost two years of negotiations, Armenia and Russia have agreed on a gas price for the next 10 years. On December 23, the Armenian government approved  the proposal to sign a protocol on amendments to the "Agreement  between the Government of the Russian Federation and the Government  of the Republic of Armenia on the terms of purchase and sale of  shares and further activities of ArmRosgazprom closed joint stock  company dated December 2, 2013 ".

The document, which provides for the preservation of gas prices at the border and new obligations for  the RA, was adopted without a report or discussion.

According to the explanation to the document, Armenia undertakes to  pay annually an amount of US $ 31.79 million to Gazprom Armenia CJSC  as security for the annual payment for the capacity of the Hrazdan  5th power unit (owned by Gazprom Armenia CJSC). "The underload of the  5th Hrazdan power unit was largely caused by the lack of trade  agreements, as well as the delay in the construction of the Iran-  Armenia 400 kV power transmission line.  Due to the incomplete  operation of the power unit, the investments of Gazprom PJSC were not  repaid, moreover, the credit liabilities increased, reaching about  100 million dollars," the explanation to the document reads.

It is noted that the fulfillment of the conditions established by the  protocol will facilitate the restart of the 5th power unit in  Hrazdan, and will also allow maintaining a stable price for gas  supplied to Armenia within ten years from 165 to 1000 cubic meters,  with a calculated heat of combustion of 7900 kcal / m3. In addition,  the Protocol provides for the settlement of issues related to the  repayment of the debt of "Yerevan TPP" to Gazprom Armenia CJSC in the  amount of about $ 30 million.

On December 20, the Public Services Regulatory Commission (PSRC)  reported that the debt burden of Armenian generating energy companies  is pushing the increase in electricity tariffs, in particular, an  increase in the basic tariff by 5.5 drams per kWh, on average - 4.7  drams per kWh.

It was noted that as a result of the analysis of various factors, it  turned out that under the current tariffs, the financial gap in the  country's power supply system in the new tariff year (from February  1, 2022) will amount to 23.8 billion drams. The main reason for the  negative financial balance in the power system is the high debt  burden of power generating and distribution companies. This concerns  the financial obligations of Gazprom Armenia CJSC to the Hrazdan-5  station (USD 31.79 million annually) under an agreement signed  between the governments of the Republic of Armenia and the Russian  Federation. According to the regulator, it is within the framework of  these agreements that Armenia can claim a stable price for Russian  gas supplies over the next 10 years at a price of $ 165 per 1,000  cubic meters. It was also noted that the process of modernization of  the Armenian Nuclear Power Plant CJSC significantly increased the  station's expenditure on repayment and maintenance of soft loans  received under the guarantee of the Government of the Republic of  Armenia.

Gazprom Armenia CJSC is a 100% subsidiary of  Gazprom PJSC , ensuring  the supply and sale of natural gas in the domestic market of the  republic. As part of the gas transmission system (GTS), 1,685 km of  main gas pipelines and gas branch pipelines are serviced. The gas  distribution system currently serves 14,600 km of high, medium and  low pressure gas pipelines and auxiliary facilities.