Iran, Armenia to Build Oil Pipeline

YEREVAN (Combined Sources)–Construction of a multi million-dollar oil pipeline connecting neighbors, Iran and Armenia is to begin next year, Armenia’s Energy Minister said Monday.

The 300-kilometer pipeline will run from Iran’s northwestern city of Tabriz to Armenia’s southern city of Yeraskh, Energy Minister Armen Movsisian told reporters on Monday.

"Armenia will receive petrol and diesel fuel from the oil refinery located in the Iranian city of Tabriz through the pipeline, construction of which starts next spring," he said.

Movsisian estimated that the pipeline would be completed in two years and would cost between $200-240 million with each country covering half the cost. The project is meant to diversify Yerevan’s energy supplies.

"In order to guarantee the country’s energy security we are moving toward the diversification of energy supplies," Movsisian added.

Armenia officially completed construction earlier this month on a 140km natural gas pipeline, which could reduce its heavy dependence on Russian energy resources and significantly boost its electricity exports. The pipeline, which runs from Iranian Tabriz to Armenia’s Southern Meghri region, will bring 2.3 to 2.5 billion cubic meters of gas annually into Armenia, which in turn will send back to Iran 3kwh of electricity for each cubic meter of gas.

The announcement comes a week after Movsisian traveled to Tehran to meet with Iranian Foreign Minister Manouchehr Mottaki to discuss the pipeline and the prospects of building a hydro electro power station on the Aras (Arax) River, the Fars News Agency reported

The oil refinery was initially to be a joint project between Armenia and Russia and would have been built in the Armenian city of Eraskh. But Russia’s withdrawal from the project effectively tanked its prospects, Movsisian said during a press conference on Sunday, December 14.

The news came as Iranian Oil Minister Gholamhossein Nozari said Sunday that a ministry delegation will travel to Turkey to discuss construction of a pipeline to take Iranian gas to Europe. Nozari said Iran and Turkey are exploring prospects for a joint venture to construct two pipelines that will transport natural gas from the Islamic Republic to Turkey and Greece.

The joint venture was discussed as Nozari–en route to attend a crucial meeting of the Organization of Petroleum Exporting Countries (OPEC)–made a stop off in Ankara and met with his Turkish counterpart Hilmi Guler late lastTuesday.

The two ministers met in an effort to advance a broader memorandum of understanding, signed in November, which includes Turkish participation in developing three phases of the South Pars gas field.

Nozari said that an oil ministry delegation will travel to Turkey by the end of next week to discuss construction of the pipeline and other details included in the agreement.

"Within the framework of the agreement, it’s been decided to guarantee the company constructing the pipeline, from the Iranian border to the Greek border, for delivery of 30 to 35 million cubic meters of gas a day," He said, responding to a question on the level of Iranian natural gas exports to Europe.

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