Interfax
Aug 26 2004

Iran to provide Armenia with pipeline credit

Yerevan. (Interfax) – Iran is to provide Armenia with a credit of $30
million to build the Armenian section of the Iran-Armenia gas
pipeline, Armenian Energy Minister Armen Movsisian told journalists
on Wednesday.

He said that the funds would be used to finance the construction of a
pipeline from the border town of Agarak to Kajaran.

The credit will be provided for 7.5 years at 5% per year.

“These conditions are acceptable to Armenia,” Movsisian said. He said
that the credit would be paid back with supplies of electricity.

He also said that construction of the Armenian section of the
pipeline should begin before the end of 2004 and that work on the
reconstruction and replacement of parts of the Kajaran-Yerevan
pipeline would be financed by the Armenian side.

He said that Iran has already started building its section of the
pipeline.

Final agreement between the two countries on this pipeline was inked
in Yerevan on May 13. The document provides for shipments of 20
billion cubic meters (bcm) of Iranian gas over twenty years in
exchange for electricity produced in Armenia.

The 700-mm diameter pipeline will run 141 kilometers and cost an
overall $210-$220 million to build. It will initially pump 1.1 bcm
per year, and that will steadily increase to 2 bcm. The gas will be
used by Armenian power plants to make and export electricity to Iran
and Georgia.