There was renewed talk in Armenia at the end of 2003 of the long-projected Iranian-Armenian gas pipeline. Talks have been going on for 10 years without ever getting very far. There are many reasons for that. First, there's the absence of financing for the idea, which would chiefly benefit Armenia. But then anyone ready to invest more than USD 20 million a year in Iran faces the threat of sanctions from the United States.
But with Russia now showing interest in building the pipeline, the situation has brightened. Talks have begun with the government of Russia and the management of Gazprom, according to Armenian Prime Minister Andranik Margarian. Were investment to be divided, he noted, among Armenian, Russian and Iranian companies, the construction-with a price tag of about USD 70-90 million-would not exceed the US limit. Karen Karapetian, who runs Armrosgazprom, spoke of his company's interest in participating in the project, for which he called 2004 the turning point. 'The gas pipeline has strategic importance for Armenia. With the country now entirely dependent on a single gas pipeline running through Georgia, the new line becomes a factor in Armenia's security,' Karapetian said. Gazprom, incidentally, owns 45% of the shares of Armrosgazprom.
The project would proceed in three phases. The first would involve laying the pipeline from Iran and connecting it to the existing Kadzharansk gas pipeline within Armenia. The second phase would take the line from Kadzharansk to Goris or Sisan. The third stage would involve linking it to the Vaiots Dzorsk regional system. Upon completion, the line would have a capacity of up to 1 billion cubic meters of gas a year, approximately the amount of gas that Gazprom and Itera now supply to Armenia (currently, 1.27 million cubic meters of gas a year).
Another even larger project is in the works. Armenia and Iran are considering joint construction of a hydroelectric power station on the Arax River, which runs between the two countries. According to Mohammad Farkhad Koleiny, Iran's ambassador to Armenia, construction of the station is expected to cost USD 155-160 million. Topographic and other preparatory work is underway, he said. He also said Armenia had asked Iran to assume the cost of the Armenian part of the project in exchange for future profits from the station. He noted, too, that Russian companies have expressed interest in participating in the construction of the station.
The project has great importance for Armenia in that it would make it possible to supply Armenia's south with power in significant quantities. Indications are that this would make it possible to run full-scale aluminum and copper plants, enormous users of energy, near their respective mineral sources. This would also be a plus for Rusal, which has purchased the Armenia foil-rolling Armenal and that would then be able to use local raw material.
Armenia and Iran also say that they are developing joint projects for the use of wind and other alternative sources of electricity production. Finally, during his visit to Armenia, Anatoly Chubais declared that his United Energy Systems of Russia was making every effort to improve exports of Armenian electricity to Iran. In view of all this, it is clear that 2004 shapes up as the year of the Russia-Armenia-Iran energy axis.
Samvel Martirosian, Rosbalt. Translated by Howard Goldfinger.
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