28 February, 2019 11:23

Armenia Ready to be a Transit Country for Iranian Gas

Armenia is ready to be a transit country for Iranian gas, Armenian Prime Minister Nikol Pashinyan said during his official visit to Iran.

After a meeting between Pashinyan and Iranian President Hassan Rouhani, the leaders of the two neighboring countries spoke at a joint press conference on bilateral economic ties, including increasing the supply of Iranian gas to Armenia.

"We have expressed readiness from the Iranian side to increase cooperation in the area of gas supply. We are also ready to carry out tripartite cooperation to export gas to Georgia," said Rouhani.

Pashinyan responded that, "Of course, it is important for us to be able to come to a common agreement on the price during further discussions and negotiations. This is a key issue in terms of the attractiveness of the deal. And we hope our representatives will conduct effective talks in this direction."

Iran’s president noted that the cooperation in the field of electricity between Iran and Armenia was also considered in the trilateral format - in cooperation with Georgia, and in a four-party format - in cooperation with Russia.

Pashinyan mentioned that Armenia is ready to be a transit country for Iranian gas. "The establishment of an energy corridor is also of great importance both in bilateral and regional context. There is a political will to solve these issues and we should hope that the negotiations will be successful," the Armenian prime minister said.

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Armenia and Iran have a "Gas for Electricity" program. Three kWh of electricity is produced at Yerevan Hydroelectric Power Plant and supplied to Iran in exchange for one cubic meter of Iranian gas. Annually, roughly 1.2 billion kWh of electricity is supplied from Armenia to Iran, while Armenia imports 370-380 million cubic meters of gas from Iran.

The Iran-Armenia gas pipeline was put into operation in 2007. Although it was originally planned to have a diameter of 1200 millimeters, allegedly under Russian pressure, Armenia built only a 700 millimeter-wide pipeline. The pipeline can provide a maximum of 2 billion cubic meters of gas per year. That is approximately what Armenia consumes in a year.

Gas for Armenia’s domestic consumption is imported from Russia at a price of $165 per 1,000 cubic meters.

In 2018, trade between Armenia and Iran totaled $364 million, of which $94 million consisted of exports from Armenia. Trade with Iran makes 4.9% of Armenia's foreign trade.

Lilit Abovyan

Translated by Zara Poghosyan

Pictured: Armenian Prime Minister Nikol Pashinyan and Iranian President Hassan Rouhani at a joint press-conference in Tehran, February 27, 2019