Iran and Armenia to Open Gas Link Monday

Iran and Armenia will inaugurate a new gas pipeline between the two neighbors tomorrow. The move is part of Tehran’s strategy to add new export markets.

Iran plans to deliver 1.1 billion cubic meters of natural gas to Armenia this year through the pipeline, the volume rising to 1.5 billion in 2013 and 2.3 billion in 2026, Reuters quoted the website of Iran’s oil ministry as saying on Saturday.

The deal was initially approved by Iran and Armenia over a decade ago but was not finalized until 2004 because the issue of financing the $200 million pipeline to Armenia was stalled.

Armenia’s gas and power markets are dominated by Russian firms.

Armenia is due to pay for the gas by exporting electricity to Iran.

Iran has the world’s second largest gas reserves after Russia.

“It is expected that in 20 years a total amount of 36 billion cubic meters of natural gas will be exported to Armenia and it is possible that this amount reaches 47 billion cubic meters,” the ministry’s website said.

The 141-kilometre long pipeline cost $210-$220 million to build, it said, adding Armenia contributed $120 million. The two countries’ presidents will attend tomorrow’s ceremony at the border.

Iran exports only modest volumes of gas, mainly to neighboring Turkey, but it will soon start exporting large volumes to Pakistan and India via a pipeline between the three countries also known as IPI ‘Peace Pipeline’.

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