Today in Yerevan, led by Alexey Miller, Chairman of the Company’s Management Committee, a Gazprom delegation took part in celebrations on the occasion of welding the last joint of the Kajaran – Ararat section, the Iran – Armenia gas pipeline.

At the event Alexey Miller met with the Armenian President Serzh Sarksyan. The parties highly evaluated the multilateral cooperation between Gazprom and Armenia and expressed their confidence in further expansion of the partnership.

“Our cooperation with Armenia is of a long-term strategic nature based on the relations of mutual trust and the partnership equally beneficial for both parties. Gazprom not only sells gas to Armenia, but is also dealing with its transportation and marketing on the Republican territory. Above this, we have extensive plans in the power energy sector. For over ten years now, the Russian – Armenian company ArmRosgazprom, the constructor of the Kajaran – Ararat section, has been successfully functioning. I am convinced, the new gas trunkline will significantly enhance the security of gas supply to Armenia and make a substantial contribution to the gas infrastructure development of the entire region,” stated Alexey Miller.

Background:

Armenia does not produce natural gas and the country’s power generation sector is totally reliant on gas imports.

Gazprom resumed natural gas deliveries to Armenia in June 2003 and, at present, is the only supplier of gas to the Republic. Gazprom export, a Gazprom’s wholly owned subsidiary, delivers gas to the Armenian – Russian border, where gas is purchased by ArmRosgazprom. Over 2007 Gazprom provided Armenian consumers with 2.05 bcm of natural gas.

On March 31, 2006 Gazprom and the Government of the Republic of Armenia signed a 25-year Agreement identifying the strategic principles of cooperation in the gas & power projects in the Republic of Armenia. The Agreement stipulates ArmRosgazprom’s acquiring from the Armenian Government the fifth power generating unit of the Razdan CHP (Razdan-5) and a range of gas facilities in Armenia. Upon completion of the deal’s investment stage Gazprom will hold a qualified majority in ArmRosgazprom.

ArmRosgazprom was incorporated in December 1997. Gazprom, Armenia’s Energy Ministry and ITERA owned 45, 45 and 10 per cent respectively in the company. Gazprom’s share in ArmRosgazprom has grown to 75.55 per cent as part of the two out of the three planned phases of the investment stage of the project (after the acquisition of additional shares in ArmRosgazprom in 2006 and 2008).

ArmRosgazprom’s major business is natural gas supply to the Armenian market. In addition, the company transports, stores, processes, distributes and sells natural gas as well as upgrades and expands gas transmission & underground gas storage systems in the Republic of Armenia.

Preparation works for the Kajaran – Ararat gas pipeline construction commenced in early 2007.

The Kajaran – Ararat section is a link between the Iran – Armenia gas pipeline and the gas transportation system of the Republic of Armenia. This 206.5-km-long section of the gas pipeline was constructed by ArmRosgazprom.