Russia Extends Low Gas Price for Armenia

Russia has extended the low gas price it charges Armenia at $150/'000 m³ until the end of 2018, the government’s official website has reported.  It cut the price to $165/'000 m³ in April 2016, while its average gas export price was $190/'000 m³ but expected to surpass $200/'000 m³ this year owing to the rising oil price.

At present, Russia is the main supplier of natural gas to Armenia through Georgia. Gazprom Armenia, 100% owned by Gazprom, has the monopoly right to supply and distribute natural gas in the former Soviet republic.

In 2013, Gazprom and Armenia signed a sales and purchase contract for 2.5bn m³/yr until 2018. Iran also supplies gas to Armenia, but that is in exchange for electricity.

Deliveries of gas to Armenia (mn m³)

Since 2011 the price of Russian gas for Armenia has started to rise. Yerevan paid the former price, but the gap between the official and the actual value was calculated as a debt, reaching $300mn by end-2013. This was repaid as 20% equity in the country's state-owned gas pipeline network, and now Gazprom owns all of it.