Ashot Manukyan, Armenia’s minister of energy infrastructure, has dismissed reports in Russian that the government is planning to divest the Yerevan gas power plant as it allegedly owes $52.3 million to Gazprom for past gas supplies.
The minister pointed out that current debt was detailed and taken care of by the loan agreement ‘The Program of Financial recovery of Energy Sector’ signed on May 12, 2016 between the Armenian government and the International Bank for Reconstruction and Development (IBRD) and the World Bank, which have lent $30 million to Armenia.
The loan is partly being used to repay the debt of the Yerevan plant to Gazprom Armenia, he stressed, suggesting the actual amount owed has now shrunk to $33.8 million.
“The Armenian government has never discussed, is not being discussed and is not planning to alienate the Yerevan Thermal Power Plant for repaying the debt to Gazprom,” the minister told the National Assembly.
He conceded, however, that parts of the gas distribution network might be divested to help raise further funding for debt service. “Technical audit has already been carried out and everything is booked,” he said. “As a result, we will get the necessary amount for repaying the debt.”
Iran considers stepping up gas exports to Armenia
Gas supply from Russia might soon be partly replaced by increasing supplies from neighbouring Iran. Under a ‘gas for electricity deal’, the National Iranian Gas Export Company (NIGEC) eyes to triple increase in gas exports to Armenia to reach 3 million cubic metres by the end of 2018 – provided that the northern neighbour will build a new power interconnector to step up electricity supply in return.
More gas supply will see Armenia step up electricity exports to Iran – 3 kWh for 1 cubic metre of Iranian gas. Armenia in 2014 reportedly received 383 million cubic metres at $189 for 1,000 cbm – the entire volume was used for power generation at a plant near Yerevan.
New power interconnectors could increase this bilateral electricity trade from currently 300 MW to around 1,000 MW. A contract for a third interconnector was already signed in August last year; and the lifting of international sanction against Iran is giving NIGEC reason to believe it can start boosting its gas exports in due course.