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Armenia Is Unique By Accident

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  • Armenia Is Unique By Accident

    ARMENIA IS UNIQUE BY ACCIDENT

    Lragir, Armenia
    Nov 1 2006

    No small country had ever been reported to build a gas pipeline for its
    market, stated Karen Karapetyan, CEO of ARG (Armrusgasard) October 31,
    who told news reporters what will the fate of the Iran-Armenia gas
    pipeline be. "The Republic of Armenia, its market, its volumes are,
    unfortunately, so small that there is not a precedent when a small
    country builds its own gas pipeline. The Republic of Armenia is unique
    in this sense because it has assumed the whole burden, return of the
    investments, and so on and so forth," stated Karen Karapetyan.

    But his following words make it clear that the Republic of Armenia is
    unique by accident. Karen Karapetyan says a transit gas pipeline would
    be possible to consider in case there was a buyer. Karen Karapetyan
    does not deny, of course, that Armenia can become a country of transit
    of gas, but he does not know when it will happen.

    "When the gas seller and the gas buyer arrange that the first sells
    and the second buys, and in deciding the transit route via Armenia is
    beneficial. It is not clear when this will happen. A transit pipeline
    is three times more expensive. When the market, the buyer and the
    seller, does not work, one has to compensate fot this money. In this
    case, only our consumer compensates. If we built a transit pipeline,
    and the tariffs were set to compensate, each of you would ask why do
    you build the pipeline on my expense, if there is not a market for
    it?" says the chief executive officer of ARG.

    In this case, of course, Armenia remains unique because when the
    possibility of transit occurs, we will have to build a new pipeline
    because the one under construction, which will be operated in December
    cannot supply the volume required for transit. Meanwhile, this shows
    that the government does not have wish rather than market for transit,
    or more exactly, courage. The point is that the Georgian prime minister
    had proposed to Armenia to turn the Iran-Armenia gas pipeline into a
    transit pipeline, but the Armenian government did not respond. And
    now the Georgians are considering the possibility of transporting
    gas via the territory of Azerbaijan.

    On the other hand, it may be good that it is not a transit pipeline,
    because Armenia is even unable to deal with the existing small one
    independently. No Armenian official has stated so far what they are
    negotiating with the Russians in connection with the Iran-Armenia gas
    pipeline. Karen Karapetyan is not an exception. It only became clear
    from his words that Gazprom is likely to buy it but Karapetyan does
    not know whether the government will agree to sell it or not. The
    chief executive officer of ARG only knows that the right thing to do
    is to have ARG take up the management of the pipeline. "There are two
    ways of giving the pipeline to ARG: combining the share capital, and
    management. It depends on the decision of the Armenian government,"
    says Karen Karapetyan.

    He says even if a separate company is set up to manage the
    Iran-Armenia gas pipeline, the engagement of ARG is inevitable in
    supplying the demand in Armenia. The point is that the 40 km section
    under construction can transport an annual 400 million cu m of gas,
    whereas Armenia is likely to get about 2 billion cu m gas from Iran
    annually. Therefore it is necessary that ARG expands its network and
    boosts the capacity of the Iran-Armenia gas pipeline. "Independent
    from who the investor is, it needs to reach agreement with ARG to
    make investments in our gas transportation system," states Karen
    Karapetyan. According to Karapetyan, it is preferable that the owner
    of the company attends to this expansion rather than the new investor
    because it will cost the consumer cheaper. The CEO of ARG states that
    there is already agreement with Gazprom, the owner of ARG.

    From: Emil Lazarian | Ararat NewsPress
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