1st section of Iran-Armenia gas line to be put into operation 12/06

ArmInfo News Agency, Armenia
Nov 10 2006

FIRST SECTION OF IRAN-ARMENIA GAS LINE TO BE PUT INTO OPERATION AT
END OF DECEMBER, 2006

The first section of Iran-Armenia gas line will be put into operation
at the end of December, 2006, RA deputy Energy Minister, Ara
Simonyan, told ArmInfo correspondent.

As for the gas line’s second section, the negotiations on this
project, according to the Minister, are underway. The Director
General of "ArmRosgasprom" CJSC, Karen Karapetyan, had informed
earlier that Armenia will be able to receive only 300-400 mln cub m
of natural gas from Iran since 2007, through the first 40-km section
of gas line from Meghri to Kajaran under construction. According to
him, it is a very small volume of gas even for inner consumption,
taking into account that Armenia intends to purchase 2,1 bln cub m of
gas from Russia in 2007. He noted that the "ArmRosgasprom" CJSC
carries out works at present to extend the Armenia’s gas-transport
net. The Company has dug trenches and lays pipelines at its own
expense. The Company’s Head said they work in the direction of
Kajaran-Sisian at present, after which a pipeline with diameter of
700 mlm will be laid from Jermuk to Ararat.

The new pipeline is necessary to assure the hydraulics of the whole
gas-transport net of Armenia, K. Karapetyan said. He added that a
task is set to the Company to increase the throughput capacity of
Iran-Armenia gas line to 2,3 bln cub m per year. However, this task
is beyond the power of "ArmRosgasprom" CJSC and additional
investments by one of its shareholders are necessary for its
fulfillment. As for the laying of transit gas line through Armenia’s
territory, this project, according to Karapetyan, is to be financed
by the gas purchaser and seller and not by the transit country. Asked
about acquiring of 40-km section of Iran-Armenia gas line by Russian
"Gasprom" , K. Karapetyan said that the Russian Company had expressed
such an intention but no decision has been made yet. He informed that
the Board of Directors of "Gasprom" OJSC has resolved on additional
emission of shares to the sum of $118,8 mln, which will cause the
Company’s share holding increase in "ArmRosgasprom" from the present
45% to 58%. These means are necessary for "Gasprom" to acquire the
fifth power unit of Hrazdan HPP, he said.