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Armenia Says Its Price Of US$110 For Russian Gas Will Remain Fixed U

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  • Armenia Says Its Price Of US$110 For Russian Gas Will Remain Fixed U

    ARMENIA SAYS ITS PRICE OF US$110 FOR RUSSIAN GAS WILL REMAIN FIXED UNTIL END OF 2008

    The Associated Press
    November 4, 2006 Saturday 5:18 PM GMT

    Armenia said Saturday that the price it is paying for Russian gas of
    US$110 (~@86) will stay fixed until the end of 2008, an announcement
    certain to rile neighboring Georgia which has been told to pay more
    than double that from next year.

    Armenian Finance and Economy Minister Vardan Khachatrian said that
    Russia's Gazprom state monopoly had agreed to freeze the price
    until Jan. 1, 2009, in return for Armenia transferring control
    of an electricity power generating unit for almost US$250 million
    (~@197 million).

    He also said that Yerevan was in talks with OAO Gazprom over the sale
    of ownership rights to the Armenian segment of a planned pipeline
    bringing Iranian gas to the country, which is due to open later
    this year.

    Gazprom this week said it plans to charge Tbilisi US$230 (~@180) per
    1,000 cubic meters of gas, compared with the US$110 that it pays now,
    ratcheting up economic pressure against Moscow's small, pro-Western
    southern neighbor.

    Georgian Prime Minister Zurab Nogaideli said that the sharp price
    rise was obviously political because other ex-Soviet nations were
    paying far less.

    On Saturday, Nogaideli said that Georgia would not agree to pay such
    a high rate because it was not commercially justified. "We are not
    going to pay an non-market price," he said.

    Energy Minister Nika Gilauri said Friday that talks were taking place
    with Azerbaijan, Iran and Turkey to secure alternative supplies of
    gas. Analysts in Georgia warned of a repeat of the gas war between
    Russia and Ukraine at the start of this year when Gazprom cut off
    supplies.

    That stoppage, amid fierce negotiations over a higher price
    demanded by Gazprom, was seen as punishment for Ukraine's pro-Western
    policies. Ukraine, which finally agreed to pay almost double at US$95
    per 1,000 cubic meters, has since managed to limit the increase for
    2007 to US$130 after Russian-leaning Prime Minister Viktor Yanukovych
    took over as head of government in the wake of his party's success
    in March polls.

    Neighboring Belarus faces a fourfold rise in gas prices to US$200,
    although Gazprom is believed to be willing to compromise if the
    country hands over 50 percent of the state pipeline through which
    Russian gas transits to western Europe.
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