“This is the first serious opportunity to split energy-transportation blockade”
Interview with Ara Marjanyan, UN expert on energy.
Mr. Marjanyan, the Armenian delegation is heading for Iran on October 30 to expand cooperation in the field of gas. What does this suppose and what should we anticipate from those negotiations?
Expectations are natural to lay ground for supplying gas from transit Georgia to Armenia and through Armenia, regarding both gas against electricity and direct gas supply to Armenia. If that program succeeds, it’ll mean acquisition of historical importance for our region, which will split Armenia’s energy-transportation blockade.
It’s been much discussed that Armenia-Iran gas pipeline diameter is small and is not convenient for the transit.
It’s narrower, however, the point is that in the period of last 5 years it’s been exploited by 30% of its capabilities. We were receiving about 0.5-1 billion m3 gas, however, at least we could have received 2-2.5 times more. The point is that there were no enough producing powers in Armenia, that’s why we were using the pipeline by 30-35% of its capability.
Will it be sufficient to provide transit?
If we mean providing gas to Georgia by 0.5 billion m3, it’s been stated by our Georgian partners a few times, that they need that much gas, suppose more than 1.5 billion m3 later on, through Georgia and the Black Sea to Europe, in that case a wider diameter pipeline will be necessary.
There is an opinion, that Iranian gas will be supplied to Armenia, and Georgia will receive Russian gas instead.
It’s a functioning scheme, one of the variants, which has been discussed and is on the table. It’ll mean that we continue the logic of swap.
Doesn’t dependency on Russia increase more? In fact, everything is conditioned by Gazprom again.
Not by Gazprom, but it’s already entering into bilateral relations, which is good. As, together with Armenia, Georgia and Iran, Gazprom is a party to the quadrilateral agreement, which raises rather serious liabilities. Isn’t Armenia in monopolistic dependency on Gazprom? And the only point, that weakens that dependency is Iran’s “Gas against electricity” program. Currently the freedom degree of current situation upon the agreement increases, as Armenia will receive gas beyond “Gas against electricity” formula as well. Thus, scopes are being expanded, and in all cases this is a step forward, as compared to the existent situation. In all cases it won’t be so in near future.
Was head of Gazprom Aleksey Miller’s visit to Armenia linked to this agreement?
For that purpose and also for the purpose supposing it—clarifying tariff possibilities of gas, from which reforms may be anticipated. However, there is a serious issue here, that the mechanism of tariff formation inside Armenia both in case of gas and electricity, is rather impermeable, rather archaic methods are being applied, approaches are outdated by 10-15 years, figures aren’t grounded. In short, here shortcomings of the Armenian side are big and we should bring our tariff system to order.
The chief of the Public Services Regulatory Commission of Armenia Robert Nazaryan stated in the NA, that gas tariff until January, and electricity tariff until February 1, are possible to be dropped. Basically, it turns out that prices for gas will drop within regional cooperation.
You say it’ll reduce, but it turns to be a “circus.” It turns out, that prior to that price was even higher, than it should be. It turns out that no one clearly possesses existent tendencies and precise arithmetic. Now I’m suspicious that anyone may clearly reply what the mechanisms are like, and what should reasonable tariff would be like in case of this or that price for gas, beyond our borders or on the border. The point is in this, that there is no clarity. And stating under likewise uncertain conditions, that it could have been decreased, then why it wasn’t being dropped, when the price for gas was decreasing everywhere, how much it should be dropped. Clarity is needed. It’s impermissible keeping a whole republic in uncertainty.
Regarding volumes Armenia was receiving what it could, and what was necessary, and regarding price, I consider, it was reasonable on the border. There is nothing bizarre here. It’s another issue that gas and electricity are becoming very expensive for our society. Moreover, there is one nuance here, they’re becoming very expensive not absolute by their prices, but as compared to incomes, guaranteed by average Armenian family. The World Bank issued a figure that communal expenditures comprise about 10% of family incomes. I think here our agents made a rather rude mistake. In fact, that share is even more.
How beneficial are the conditions for Armenia-Russia-Georgia-Iran quadrilateral agreement to us?
Sincere answer to this question is the following—time will show, as few people are aware of the details. And even fewer of the process of negotiations. One thing is obvious: this is the first serious possibility of splitting energy-transportation blockade.
By Gayane Khachatryan
