Formalization of Armenia Iran Pipeline Deal in Late April

YEREVAN (Interfax)–The final contract formalizing the construction of a gas pipeline linking Armenia and Iran–will be signed late April in Yerevan–said Armenian Energy Minister Armen Movsisian.

Expected to meet Armenia’s domestic needs–the pipeline will be built in 20 months–with construction beginning next year. The two countries have already agreed on the volume of gas to be produced and the parameters of the pipeline. Movsisian said the price for Iranian gas–based on the contract–is "more than reasonable."

The cost to build in Armenia is estimated at $100 million–while costs are higher for the Iranian side. In Armenia–the project involves building new sections onto existing pipelines and reconstructing a number of segmen’s of Armenia’s gas transportation system.

The pipeline will enable Armenia to receive gas both from Iran and Turkmen’stan.

The project received Russia’s blessing in February when Russian Deputy Prime Minister Boris Alyoshin said that Gazprom may become the operator of a portion of the pipeline in the future; a feasibility study is underway.

The European Bank for Reconstruction and Development has expressed readiness to finance the project–which has been on the drawing board since 1992.

Armenia and Iran’signed an intergovernmental agreement in 1995 establishing the route of the pipeline–which stretches 114 km–including 41 km in Armenia and 100 km in Iran. The agreement also sets the price for gas to be transported through the pipeline at $84 per 1,000 cubic meters.

The possibility of expanding the pipeline to the Armenia-Georgia border is being considered–to stretch 550 km–and has a yearly production capacity of 4.5 billion cubic meters. The cost of construction would increase to $306 million.

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