Simonov: lower gas price for Armenia is possible
After Armenia, Georgia, Russia and Iran signed a quadruple memorandum on cooperation in energy area and sanctions were lifted from Iran, Armenia got a chance to become a flagship player in electric energy industry. It is very important to Armenia to know whether Russia will lower the natural gas price for its strategic partner or not.
Konstantin Simonov, the head of Russia's National Energy Security Fund, spoke about that in an interview with ARKA News Agency.
- How promising is Armenia's transformation into a regional energy hub given the fact that Iran has got rid of sanctions?
- It depends on what do you mean when you say 'energy hub'. It is truth – many expectations are forming now around Iran, and I know, there is excitement over the matter also in Armenia. I would be accurate with Iranian theme. When sanctions are lifted from such a large player, it always sparks a large-scale agitation.
- Do you find it wrong to cherish hopes?
- Let's look at opportunities really. If we speak about an energy hub, we should understand what transit is it - what will be transported and where. How transit will go to Europe through Armenia? The idea is fine, but if we look at a map we'll see that it is not understandable what for Iranian gas will be conveyed through Armenia.
- Do you mean that it would be more beneficial to transport Iranian gas through Azerbaijan?
- Hypothetically, this is not necessary to do it also via Azerbaijan. What's the use of involving other countries when Iran and Turkey have a common border? As for Georgian transit, this is possible, but it is only one billion cubic meters. Although this transit money might be useful to Armenia, but this story can’t give grounds for speaking about an energy hub.
If Iran is willing to struggle and build a pipeline through Armenia, we will not resist it. Russia has repeatedly lost and returned Georgian market and this is not a market for which we will sorrow and compete. Once we gave it to Azerbaijan, which didn't cope with it. Now we partially returned it, resuming supply. When we speak about a transit hub through Armenia, which will connect Iran and Russia, we may discuss this story hypothetically, though there are many stipulations connecting with future relations between Russia and Iran, since there were numerous plans yet before the lifting of these sanctions. If we speak about connection of Russia with Iran through Armenia, I may say this can be discussed.
- Do you find decrease of Russia's gas price for Armenia likely?
- This is a good question. It is really very interesting, since it is not a secret that prices for Belarus and Armenia have traditionally been lower than for other Gazprom's consumers.
When prices were low [compared with prices for other countries], excuse me - not everybody in Armenia appreciated that. I understand that Armenia is raising this issue because prices started falling and this difference, which looked significant, is narrowing very quickly. For example, the price for Russian gas in Germany is $190 per 1,000 cubic meters. Of course, when difference is not large, such issues emerge in Armenia. I personally think that this problem will be solved. Russia may down the gas price by 15-20 percent. [Now one 1,000 cubic meters for Armenia cost $165].
- Armenian economists say that the international price for 1,000 cubic meters of gas is $85 today.
- Gas costs $85 nowhere, but Russia's domestic market. It costs $90 at the United States' domestic market. The lowest price in Europe is $200, and in Japan it costs $390. The price you have mentioned is a mythic, but an idea to lower price for the gas exported to Armenia is feasible, I think.
- In the end of the last year, Armenia, Georgia, Russia and Iran signed a quadruple memorandum to cooperate in energy area and to create an energy corridor. Do you think such a corridor can be created soon?
- A nice idea, I can say. This is a splendid large-scale plan, but I take this theme quite accurately so far, since there are more feasible projects and there are beautiful, but still hypothetical themes. This story, applies rather to the second category.
- It means that this is a matter of the future?
- I think it is so for now. ---0----