RUSSIAN GAS HASN'T REACHED ARMENIA YET

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000127 SIPDIS SIPDIS DEPT FOR EUR/CACEN E.O. 12958: DECL: 01/30/2016 TAGS: ENRG PREL RS GG AJ IR AM SUBJECT: RUSSIAN GAS HASN'T REACHED ARMENIA YET REF: A) YEREVAN 119 B) YEREVAN 110 C) YEREVAN 98 D) MOSCOW 790 E)TBILISI 167 YEREVAN 00000127 001.2 OF 002 Classified By: DCM A.F. Godfrey for reasons 1.4 (b, d). -------------- SUMMARY -------------- ¶1. (C) On January 29, Armenia cut gas to its thermal power plant in Hrazdan (which converts gas to electricity), reducing the country's average daily consumption to about 3.5 (down from 6.7) million cubic meters (mcm),enough to conserve about one more day of useful gas reserves. Banking on reports from Gazprom that natural gas flows should reach Armenia by "no later than 8:00 p.m." local time January 30, an ArmRosGazProm spokeswoman told us other significant rationing measures would not be necessary unless additional problems delayed delivery. According to Deputy Minister of Energy Areg Galstyan, the GOAM was looking into initial reports that portions of the pipeline in Georgia and Armenia "may have frozen" when supplies were cut, one possible obstacle, he contends, that could delay restoring the flow of gas to Armenia. Compounding concerns, a circuit breaker on one of two main power lines between Armenia and Iran failed on January 27, leaving Armenia's supply of electricity from Iran dependent upon the only remaining line. "We are all hoping the gas reserves will be enough, but we should know at 8 o'clock tonight," Galstyan told us. End Summary. -------------- ARMENIA: TIME TO TURN OUT THE LIGHTS? -------------- ¶2. (C) Since the explosions in North Ossetia on January 22, GOAM officials and ArmRosGazProm executives have predicted that Armenia's useful reserves contain only enough gas to last through January 29. ArmRosGazProm spokeswoman Shushan Sardaryan told us, and a U.S. contractor who works closely with Armenian energy regulators confirmed, that Armenia cut gas to its thermal power plant in Hrazdan (which converts gas to electricity) on January 29, reducing Armenia's average daily consumption from about 6.7 million cubic meters (mcm) to "about 3 or 3.5" mcm, enough to last through January 30. "We are all hoping the gas reserves will be enough, but we'll know at 8:00 tonight," Deputy Minister of Energy Areg Galstyan told us. -------------- DOWN TO THE WIRE? -------------- ¶3. (C) Banking on the same reports from Gazprom that natural gas flows should reach Armenia through Georgia by "no later than 8:00 p.m." local time January 30, ArmRosGazProm spokeswoman Shushan Sardaryan told us that significant rationing measures would not be necessary unless additional problems develop in the pipeline. According to Deputy Minister of Energy Areg Galstyan, however, the GOAM was concerned by initial reports that portions of the pipeline in Georgia and Armenia "may have frozen" when supplies were cut, possibly adding another obstacle to restoring the flow of gas to Armenia. -------------- -------------- ELECTRIC SUPPLY FROM IRAN AT MAXIMUM CAPACITY, BACKUP BLOWS -------------- -------------- ¶4. (C) A circuit breaker on one of two main electric lines between Iran and Armenia failed on January 27, leaving Armenia's supply of electricity from Iran dependent on the only remaining line, according to PA Consulting's Deputy Chief of Party Armen Arzumanyan. Arzumanyan, who has been working closely with energy regulators here for several years, told us the lost line does not significantly affect the flow of electricity from Iran because Armenia's domestic electric infrastructure (the line linking southern Armenia to Yerevan) -- running at 400-440 megawatts -- is already at full capacity. The lost line did, however, mean Armenia now lacks a backup if the current line were to fail. Arzumanyan said he had not heard any estimates about the length of time it would take to restore the failed power line. -------------- ARMENIAN DELEGATION TO IRAN TO TALK ENERGY -------------- YEREVAN 00000127 002.2 OF 002 ¶5. (C) Amid ongoing confusion about supplies and timing of supplies, a GOAM delegation led by Presidential Advisor Artashes Tumanyan departed for Iran on January 29 for a long-planned Iran-Armenia Joint Economic Commission meeting to review, according to a report from Iran's Mehr News Agency, "the economic and political relations as well as trade cooperation between the two countries and in particular, possible avenues for bolstering bilateral cooperation in various energy fields." (Note: Deputy Minister of Energy Areg Galstyan told us that Minister of Energy Armen Movsisyan also planned to travel with the delegation to Tehran. End Note.) -------------- COMMENT: CUTTING IT CLOSE -------------- ¶6. (C) Armenia's electric infrastructure is stretched beyond capacity and the country's natural gas reserves are almost depleted. As the GOAM hopes for delivery of Russian gas free of complications, officials are also planning conservation measures (just in case). If the flow of gas, currently scheduled to resume by 8:00 P.M. (local time) January 30, is delayed, energy officials have few options for avoiding significant rationing and widespread outages of the kind reported in Georgia (ref E). EVANS