VZCZCXRO6239
PP RUEHDBU
DE RUEHYE #0127/01 0301417
ZNY CCCCC ZZH
P 301417Z JAN 06
FM AMEMBASSY YEREVAN
TO RUEHC/SECSTATE WASHDC PRIORITY 2310
INFO RUEHKB/AMEMBASSY BAKU PRIORITY 0766
RUEHMO/AMEMBASSY MOSCOW PRIORITY 0988
RUEHSI/AMEMBASSY TBILISI PRIORITY 1611
RUCNCIS/CIS COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP

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). 
 
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SUMMARY 
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¶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