Gazprom delegation headed by Alexander Ryazanov, Deputy Chairman of Gazprom Management Committee, completed its working visit to the Republic of Armenia. Alexander Ryazanov held a meeting with Robert Kocharyan, President of Armenia, during the visit.

The parties discussed the current situation on gas supplies to Armenia, the issues related to the conditions of gas transportation network of the republic and the neighboring transit countries, and the construction of Iran-Armenia gas pipeline.

Alexander Ryazanov and Robert Kocharyan reviewed business results of a joint Russian-Armenian venture - ArmRosgazprom - in 2004, its plans for 2005, conditions of utilization of Abovyanskii underground storage facility and the possibilities of its expansion, Gazprom's prospects in purchasing Razdanskaya heat power plant, and other issues of bilateral cooperation.

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Armenia is not producing any natural gas, and its energy generation industry is totally dependent on gas imports.

Gazprom resumed gas supplies to Armenia in June 2003, and is currently the only supplier. Gas is supplied by Gazexport (a wholly owned subsidiary of Gazprom) to the Armenian border; at the border gas is purchased by ArmRosgazprom. In 2004 Gazprom supplied 1.33 billion cubic meters of gas to Armenia.

Armrosgazprom was established in December 1997. Gazprom and the Ministry of Energy of Armenia own 45% of the stock each, and Itera owns the remaining 10%.

ArmRosgazprom's main business is gas supply for the domestic market in Armenia. It also transports, stores, processes, distributes and sells natural gas, and is engaged in reconstruction and expansion of the gas transportation and underground storage facilities system in Armenia.

The capacity of Abivyanskii underground storage facility located in Armenia is around 85 million cubic meters. An expansion to 240 million cubic meters is planned.

The government of Armenia is focused on sustaining national energy security by means of Iran-Armenia gas pipeline construction and diversification of gas supply sources, including eliminating its dependency on gas transit via Georgia.

Gazprom worked out "The investment substantiation of Iran-Armenia gas pipeline construction and the Republic of Armenia gas distribution system expansion taking into account the "gas in exchange for electricity" agreements". This was done following the Armenian side's request for assistance in Iran-Armenia gas pipeline construction and the Russian President Vladimir Putin's order dated May 28 2004 ? PR-875.

Razdanskaya heat power plant is the largest in Armenia. Its capacity is 1100 megawatts, seasonal peak power consumption during winter is 800 megawatts.

The power plant was handed over to Russia as a means of Armenia's state debt repayment in the amount of US$ 31 million. At the same time Armenia took the obligation to set up tariffs which would guarantee the refund of the value of the property in 15 years, excluding exports revenues.

In order to attract investment into modernization of Armenia's energy industry, the government of Armenia expressed its intention to sell the fifth block of Razdanskaya heat power plant (construction of which is not completed) with the capacity of 300 megawatts.

DIVISION OF RELATIONS WITH MASS MEDIA