Ani Mejurmian*
(Eurasianet) — Iran and Armenia have agreed to double the amount of natural gas Iran sells to Armenia and extend the gas trade agreement until 2030.
The deal was made during the visit of Armenian Prime Minister Nikol Pashinyan to Tehran. The memorandum of understanding was signed on November 1 by Majid Chegeni, Iran’s Deputy Oil Minister for Gas and Director of the National Iranian Gas Company (NIGC), and Gnel Sanosyan, Armenia’s Minister for Territorial Administration and Infrastructure.
Armenia currently imports about 365 million cubic meters of natural gas from Iran every year. “We are currently exporting 1 million cubic meters of gas to Armenia every day, which will double under the new memorandum,” Chegeni said.
The two sides will exchange energy under the 2006 gas and electricity barter agreement. Armenia is getting 1 cubic meter of gas from Iran in exchange for 3 kilowatt hours of electricity produced by Armenian thermal power plants.
Contract expansion has been underway for some time. The increase in gas imports has been made possible by Armenia’s increased power generation capacity, economist Suren Persian told Eurasianet. The new thermal power plant, built by Italian company Renco, will be operational in 2021 and will be able to complement its other supplier, the state-owned Yerevan Thermal Power Plant.
Even with additional imports from Iran, Russia will remain Armenia’s main gas supplier. Armenia buys more than 2 billion cubic meters of Russian gas annually, paying $165 per 1000 cubic meters. Gas prices in Russia rose by $15 per 1,000 cubic meters in 2019, and their prices have remained unchanged.
In April, Armenia began paying Russian gas bills in rubles, but rates are still pegged to dollar prices. Supply has not been affected despite market turmoil. In 2021, Armenia paid Russia her $414 million.
“Russian gas is still cheaper than Iranian gas,” Parsian said. “The problem is that Russia wants the money, but Iran agrees to pay with electricity.”
Further expansion of Iran-Armenia’s energy trade is likely to proceed in the future.
Electricity is currently supplied to Iran by two transmission lines, but the construction of the third high-voltage line has been significantly delayed and is expected to be completed by the end of 2023.
In May, Deputy Minister for Land Administration and Infrastructure, Hakob Vardanyan, told RFE/RL, “Armenia will export up to 1.8 billion cubic meters of Iranian power after completing the long-term construction of a third transmission line connecting Armenia. of gas will be able to be imported,” he said. Iran. ”
Increasing gas imports from Iran has been around for a long time, but it is geopolitically opportunistic.
Relations with Russia are strained, with Armenians accusing Moscow of failing to come to aid during Azerbaijan’s September attacks.Russia, meanwhile, broadcasts more critical coverage of the conflict with Azerbaijan and has sharpened its attacks on Armenia’s current leadership.
Iran, meanwhile, has become a closer partner to Armenia, regularly warning Azerbaijan against attempts to seize control of Armenian territory. effectively flagged the area.
In Tehran, Pashinyan and Iranian President Ibrahim Raishi exchanged warm words on many aspects of bilateral relations. Raisi noted that trade between the two countries in 2022 will increase by 43% year-on-year, and the two countries aim to increase total annual trade to $3 billion. “We will definitely achieve this goal,” he said Raisi. Between January 2022 and August 2022, bilateral trade reached $427 million.
Pashinyan said in Tehran that there is “great potential” for closer cooperation between Armenia and Iran in areas such as energy, agriculture and road building.
Sanossian said it has urged Iranian companies to participate in the Syunik road construction project and has discussed with Iranian colleagues plans to build a 4-kilometer tunnel under a mountain pass on the road leading to the border with Iran. The current road he crosses a 2,500 meter pass and is often closed during the winter months due to bad weather.
Regional security was perhaps the most important topic on the agenda. Pashinyan headed directly to Tehran after meeting Russian President Vladimir Putin and Azerbaijan President Ilham Aliyev in Sochi on October 30.
“It is important to inform our Iranian partners about what is happening in the context of Armenia-Azerbaijan relations, Armenia-Turkish relations and the resolution of the Nagorno-Karabakh conflict,” Pashinyan said in a joint news release with the Iranian president. said at the briefing.
Next, Raisi warned against the influence of “external forces” in the Caucasus. It probably meant the west side.
“The Caucasus region is part of Iran’s history, civilization and culture, and we are sensitive to the Caucasus region. Security and peace in the Caucasus region are important to Iran,” he said. “The presence of outside forces … will only exacerbate local problems.”
*Ani Mejurumyan A journalist based in Yerevan.
