SKRIN Market & Corporate News
January 29, 2007 Monday 11:44 AM GMT

Russia considering building oil refinery in Armenia

Gazprom Neft confirmed that it is considering building an oil
refinery in Armenia. Kommersant has learned that the proposed plant
would have a capacity of 7 mln tons of oil per year and be located on
the border with Iran. The refinery would cot a minimum of $1.7
billion, not counting transportation infrastructure, which would cost
an additional $1 billion. Industry analysts say that the project is
senseless from an economic point of view and attribute interest in it
to political considerations. An oil refinery in Armenia would indeed
be a political undertaking and provide the participants with
political dividends.

Sources say that the Armenians originally suggested a refinery with a
capacity of 3-4 mln tons per year. The Russians, however, responded
by suggesting that the capacity be doubled, although Armenia’s
consumption of petroleum products does not top 250,000 tons a year.
The location of the plant, on the Armenian-Iranian border near Megri,
explains the excess. Oil would be received by the plant from Iran
through a 200-km. pipeline from Tabriz, where a refinery already
exists. Petroleum products would be transported back to Iran by
train, on a line that, like the pipeline from Tabriz, does not yet
exist Kommersant reported.