Agency WPS
The Russian Oil and Gas Report (Russia)
March 16, 2005, Wednesday

ARMENIA STARTS CONSTRUCTION OF GAS PIPELINE FROM IRAN

Armrosgazprom (a joint venture of Gazprom and the government of
Armenia) plans to start construction of the Armenian extension of the
Iran-Armenia gas pipeline in a month. On March 11, head of the
company Karen Karapetyan reported that the company had to change the
initial project a little, for example, making provisions for “some
objects” along the route. According to Karapetyan, by the end of
March the Iranian party will present the final financial calculations
to Armenia and will approve the new project.

The main contract for construction of the Iran-Armenia gas pipeline
was signed in May 2004. Construction of the pipeline between Armenia
and Iran should be completed by January 1, 2007. In the first stage
Iran should supply 1.1 billion cubic meters of natural gas a year to
Armenia and starting from 2019 it should supply 2.3 billion cubic
meters annually. The contract was signed for 20 years. The project is
estimated at $200-250 million. Its first phase includes construction
of 100 kilometers of pipeline on Iranian territory and 41 kilometers
on Armenian territory (Megri-Kadzharan), which will enable Armenia to
receive 1.5 million cubic meters of gas per day. The second phase
includes construction of the Kadzharan-Sisian-Dzhermuk-Ararat
extension. Armrosgazprom and several foreign companies united into a
consortium are going to participate in construction of this
extension. Negotiations are nearing completion and very soon the
Armenian government will name the contractor for construction of the
second extension of the Iran-Armenia gas pipeline.

In early March, Armrosgaz was named the winner of the tender for
construction of the Megri-Kadzharan extension. The Iranian company
Sanir, project contractor, already completed preparation of the
technical project, geological and mapmaking documentation. Sanir will
also supply pipes and equipment. According to Karapetyan, use of the
gas pipeline for transit purposes is not planned and the scheme “gas
in exchange for electricity” will enable Armenia to cover its
domestic needs.

Source: Vremya Novostey, March 14, 2005