The Gazprom headquarters hosted today a working meeting between Alexey Miller, Chairman of the Company's Management Committee and Vardan Arutyunyan, Director General and Chairman of the ArmRosGazprom Board.

The meeting participants reviewed the issues of Russian gas pricing for Armenian consumers between 2012 and 2013.

In addition, a focus was placed on the status of the agreement stipulating Gazprom's participation in the gas and power projects in the Republic of Armenia as well as the current operating results of ArmRosGazprom.

During the meeting, the parties noted the successful commissioning of the fifth power generating unit at the Hrazdan Thermal Power Plant enabling to largely satisfy the Armenian power needs and to increase power supplies to the neighboring countries.

Background

Armeniadoes 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. Gazprom Export delivers gas to the border with Armenia where it is purchased by ArmRosGazprom. In 2011 Gazprom provided Armenian consumers with some 1.6 billion cubic meters 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 Gazprom's participation in the gas and power projects in the Republic of Armenia. The document provides for Gazprom to increase its ownership stake in ArmRosGazprom via the additional share issue. As a result, Gazprom acquired an 80 per cent stake in ArmRosGazprom. The funds received due to the share issue were allocated for purchasing the fifth power generating unit at the Hrazdan Thermal Power Plant and constructing the gas infrastructure facilities in Armenia.

Incorporated in December 1997, ArmRosGazprom is focused on natural gas supplies to the domestic Armenian market. In addition, the company transports, stores, distributes and sells natural gas as well as upgrades and expands gas transmission and underground gas storage systems in the Republic of Armenia.

In January 2012 the fifth power generating unit at the Hrazdan Thermal Power Plant was brought into pilot operation. After the state-of-the-art gas turbines were installed, the total capacity of the Hrazdan Thermal Power Plant reached 480 MW. The fifth power generating unit is expected to produce up to 1.8 billion kW of electricity in 2012.