By Emil Danielyan

Radio Liberty, Czech Rep.
Nov 30 2006

The widely anticipated handover to a Russian company of a pipeline
that will supply Armenia with Iranian natural gas is not a forgone
conclusion, Prime Minister Andranik Markarian claimed in a Russian
newspaper interview published on Friday. He also reiterated Yerevan's
hopes that Russia will defuse its festering confrontation with Georgia.

"The construction of the pipeline is not yet complete, and it is still
too early to speak of its transfer or non-transfer to any operator,
including Gazprom," Markarian told the Moscow daily "Kommersant,"
referring to the Russian state gas monopoly. He said the pipeline's
first Armenian section will come on stream "soon."

Gazprom makes no secret of its desire to control the pipeline which is
supposed to reduce Armenia's strong dependence on Russia for energy
resources. Last April the company confirmed but then refuted reports
that it will get hold of the first 40-kilometer stretch of the facility
as part of an agreement that allowed Armenia to temporarily avoid a
hike in the price of Russian gas.

Armenian officials insist that the Russian giant will only get an
incomplete thermal power plant in Hrazdan and a controlling stake in
Armenia's national gas distributor, ArmRosGazprom (ARG), as a result of
the deal. According to Energy Minister Armen Movsisian, the government
will choose the owner of the under-construction pipeline next spring.

Still, Markarian himself strongly hinted on October 31 that the
pipeline will be incorporated into ARG, 58 percent of which is now
owned by Gazprom. "It would be illogical to have two gas distribution
networks in Armenia," he said.

The pipeline from Iran is taking on a greater significance in the
light of the mounting Georgian-Russian tensions that increasingly
threaten continued Russian gas supplies to Georgia. Armenia, which
imports Russian gas through Georgian territory, might also be affected
as a result.

"We are interested in a quick resolution of the problematic aspects
of Russian-Georgian relations because cooperation between Russia and
Georgia is one of the most important components of stability in our
region," Markarian told "Kommersant."

The Armenian authorities signaled earlier their frustration with the
continuing Russian transport blockade of Georgia which is hurting
Armenian companies trading with Russia.