Russian state gas incumbent Gazprom has agreed a cut price deal to supply gas to former Soviet state Armenia in return for ownership of energy infrastructure assets there.

Gazprom is to double the tariffs on its gas supplies to Armenia, however this represents a significant discount on the average rises the Russian outfit has recently negotiated with other neighbor states.

In return for cheaper prices Armenia has agreed to hand over control of its gas distribution network, ArmRosGazprom , and its part of the planned Armenia-Iran gas pipeline.

Gazprom will charge Armenia $110 per 1,000 cubic metres of gas deliveries during the discount period, which will last until 2009. The rate is just under half that charged by the gas titan for its supplies to Europe.