IRAN-ARMENIA GAS PIPELINE LAUNCHED

Regnum, Russia
March 20 2007

Iranian natural gas started to flow to Armenia through the new pipeline
launched yesterday, March 19, following the opening ceremony attended
by presidents of Armenia and Iran Robert Kocharyan and Mahmoud
Ahmadinejad. Present also were high-ranking officials from both
countries. REGNUM presents photographs from the ceremony.

As it has been reported earlier, the pipeline is being tested, after
which it will be fully incorporated in the gas-distributing system of
Armenia. The pipe is 700 mm in diameter; it will deliver to Armenia
1.1bn cubic meters of natural gas at the first stage of the contract
and 2.3bn cubic meters after 2019. The agreement is signed for 20
years. For each cubic meter of the Iranian gas, Armenia is to deliver
to Iran 3 kWh of energy.

To achieve the planned volumes of Iranian gas supplies to Armenia,
the Armenian-Russian ArmRosgazprom Company will construct further
197 km of the pipeline into the Armenian territory. The first stage
of the project is estimated at $33mln, of which 75% are lent to the
Armenian side by the Export Development Bank of IRAN, and the rest is
to be funded from Armenian budget. The construction’s prime contractor
at this stage of the project is the Iranian Sanir Company.

ArmRosgazprom on its behalf plans to invest 52bn drams (about
$144.5mln) in increasing the carrying capacity of the Armenian
gas-transporting system at the section Kajaran-Ararat. Increasing the
system’s carrying capacity will let import to Armenia about 2.3bn
cubic meters of Iranian natural gas annually, starting as early as
in 2008. Today, the system allows import of about 300-400mln cubic
meters of Iranian gas.