Gas Exports to Armenia to Surge in 2017

Gas Exports to Armenia to Surge in 2017
Gas Exports to Armenia to Surge in 2017

The export of natural gas from Iran to Armenia is planned to increase in 2017, said Armenia's deputy energy minister.

"The hike in gas import from Iran will allow for boosting electricity exports to the Islamic Republic," Hayk Harutyunyan told RFE/RL on Tuesday, Moj News Agency reported.

In 2004, Tehran signed a 20-year contract with Yerevan to export gas to its northern neighbor. Based on the agreement, Iran's natural gas is used by Armenian power plants to generate electricity and, in return, export electricity to Iran. The cross-border gas pipeline was commissioned in 2007 and exports began in mid 2009.

The two sides signed a $120 million contract in August to construct the third electrical transmission line (ELP) between the two states over the course of 18 months. About $95 million of the entire cost will be funded by Export Development Bank of Iran.

The two already operational lines have the capacity to transfer 300 megawatts of electricity.

Harutyunyan says the third line will allow increasing the volume of the “gas for electricity” swap deal.

"Armenia must benefit more from the high capacity of the trans-border gas line," he said, without specifying details.

In his meeting with Oil Minister Bijan Namdar Zanganeh earlier this month in Tehran, Armenian Energy and Natural Resources Minister Ervand Zakharyan predicted that the construction of the third transmission line for power exchanges between Armenia and Iran would be completed by 2018.

"The annual power exchanges of Armenia and Iran currently surpass 1 billion kWh and we hope that the figure will considerably increase after the launch of the third electricity transmission line between the two countries," he said.

Previous assessments suggest Armenia's hydrocarbon reserves are small and the country is dependent on imports, particularly from Russia. Due to political conflicts with its oil-rich eastern neighbor Azerbaijan and the western neighbor Turkey, Yerevan meets its national energy demand chiefly though exports from Iran and Georgia.