Will the Price of Gas Supplied to Armenia Remain Stable for 10 Years? Government Makes Decision

The government approved a draft of a memorandum to amend the sales agreement signed with the 'HayRusGazard' CJSC in its meeting today, November 24. According to the draft, the government will pay 'Gazprom Armenia' CJSC 34.79 million USD annually for the annual capacity payments for the 5th energy block of the Hrazdan Power Plant. This decision was made during today’s government meeting.

The justification of the draft states that the Hrazdan thermal power plant currently operates under capacity and is frequently forced to halt operations to prevent excess electricity production. ‘The underutilization of the 5th energy block of Hrazdan has largely depended on the lack of commercial agreements, as well as delays in the construction timelines of the 400 kV Iran-Armenia power transmission line. The operation of the energy block at less than full capacity has resulted in investments made by 'Gazprom' CJSC not being recouped, leading to an increase in loan obligations, which have reached around 100 million USD,’” the justification notes.

“The implementation of the conditions set forth in the memorandum will contribute to the reactivation of the 5th energy block of Hrazdan and will also create the opportunity to maintain a stable price for gas supplied to Armenia over the next ten years. Additionally, the memorandum addresses the settlement of around 30 million USD obligations of the 'Yerevan Thermal Power Plant' to 'Gazprom Armenia' CJSC. The memorandum was drafted and signed with the Russian side as a result of negotiations lasting nearly two years. This memorandum will promote the deepening of cooperation between the two countries in the energy sector, create favorable conditions for economic development, and enhance the level of Armenia's energy security,” the document states.