Armenia, Iran sign $30-mln credit agreement for pipeline construction

Interfax
Sept 9 2004

Yerevan. (Interfax) – Armenia and Iran signed a $30-million credit
agreement on Wednesday to finance the construction of the Armenian
section of the Iran-Armenia gas pipeline.

Energy is an important sector in cooperation between the two countries,
which have already gained a wealth of experience in cooperation in
this sphere, Armenian President Robert Kocharian said at a press
conference following the signing of the agreement.

“More serious steps will be taken based on this experience on the path
to unite the infrastructure of both states and raise mutual relations
to a qualitatively new level,” Kocharian said, adding that the
construction of the pipeline has an important regional significance.

Iranian President Mohammad Khatami, who was at the press conference,
also said bilateral cooperation was important in the energy sphere.

According to the agreement, Iran is to provide Armenia with a credit
of $30 million to build the Armenian section of the Iran-Armenia gas
pipeline. The credit will be provided for 7.5 years at 5% per year.
The funds will be used to finance the construction of a pipeline from
the border town of Megri to Kajaran.

Construction of the Armenian section of the pipeline should begin at
the end of 2004. Armenia will finance work to reconstruct and change
parts on the Kajaran-Yerevan gas pipeline.

Armenia and Iran signed an agreement on May 13 for the construction
of a pipeline between the two countries. The pipeline is 141 km long,
inducing 41 km in Armenia and 100 km in Iran. The total cost of the
project is estimated at $210-$220 million. The pipeline is expected
to be launched before January 1, 2007.

Gas should start to arrive in Armenia from January 2007 and will
be used at Armenian thermal power plants to produce electricity for
export to Iran. Iran will supply 36 billion cubic meters of natural
gas to Armenia over 20 years according to the document.