Iran, Armenia Negotiating Increase in Gas Export

Iran, Armenia Negotiating Increase in Gas ExportIran, Armenia Negotiating Increase in Gas Export

Iran's gas export to Armenia will witness a threefold increase as soon as the new round of gas negotiations between the two sides are concluded, the chief executive of National Iranian Gas Export Company said.

"More than 1 million cubic meters of natural gas are exported to Armenia daily and it will reach 3 mcm per day as soon the new agreement is signed," Alireza Kameli was quoted as saying by Mehr News Agency.

Underscoring the development of gas transmission and distribution infrastructures in northwest Iran, the official noted that Iran's gas export to Caucasian countries, especially Armenia, can experience a noticeable rise.

According to the official, infrastructures such as pipelines, export terminals and compressor stations are in place and as soon as the final agreement is reached, 3 mcm of gas will be exported to Armenia daily.

Referring to Iran's capability to transfer more than 3 billion cubic meters of gas to Armenia per annum, Kameli added that currently Iran barters gas for Armenian electricity.

Asked about the Persian Gulf state's volume of gas export to Armenia, he noted that there are no restrictions to meet the Caucasian country's need for the strategic commodity.

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, which is then exported to Iran. The cross-border gas pipeline was commissioned in 2007 and exports began in mid 2009.

According to the official, Iran can export 5 mcm of gas per day to Armenia, but the northwestern neighbor cannot take advantage of the pipeline's untapped capacity due to its lack of infrastructure for gas refining and storage.

  Gas-Electricity Barter

"Tehran imports 3 kilowatt-hours of electricity from Yerevan in exchange for 1 cubic meter of natural gas," Kameli said, stressing that the terms of the present agreement will be revised in the near future.

Stressing the need for developing infrastructures in Armenia to boost gas export, the official said, “The second phase of the [electricity-gas barter] agreement between the two sides urges Armenia to take serious measures to complete the third power transmission line, for which it signed an electricity supply contract, valued at $120 million, with Iran.

"Construction operation of the 400-kilowatt double circuit power transmission line has commenced and as soon as it goes on stream, gas export to this country will experience a drastic rise. Interestingly, the whole project is being undertaken by Iranian experts," he said.

It is predicted that upon the completion of the third power transmission network, Iran-Armenia electricity exchange, currently standing at 300 megawatts, will increase by 1,000 MW.

The new electricity transmission line has other advantages, the most important of which is connecting Iran's national power grid to that of Russia and Georgia, making it possible to transmit electricity to Caucasian states.

Iran exports natural gas via pipelines to three neighboring countries, namely Turkey, Armenia and Azerbaijan. Ankara receives more than 90% of Iran’s gas exports under a long-term contract and Yerevan and Baku receive around 6% and 3% of Iran’s natural gas.