PIPELINE, BUT NO REFINERY, FOR ARMENIA
by Amber Corrin

Global Refining & Fuels Report
March 25, 2009

Armenia and Iran will soon begin construction of a 168-mile pipeline
from the Tabriz refinery in Iran to Yeraskh, Armenia, for the transport
of gasoline and diesel fuel. It is expected to cost approximately
$240 million, with completion for 2011, according to published reports.

Completion of the pipeline will help diversify Armenia’s energy
resources and satisfy its national demand for oil products, Armenian
Energy Minister Armen Movsisyan said at a press conference.

"The oil pipeline will first of all satisfy Armenia’s needs, including
strengthening of energy security of the republic, reduction of
transport expenses and establishment of competitive market prices,"
Movsisyan said.

Armenia also will convert pipelined gas into electricity for transfer
back to Iran, according to a UPI report.

Feasibility studies were conducted in 2007 for a joint Russia-Armenia
refinery project that would process 7.5 million metric tons of
Iranian crude.

Plans were cancelled after Russia reportedly decided the project was
not economically viable. Gazprom Enhanced Coverage LinkingGazprom
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a subsidiary of Russia’s state-owned Gazprom Enhanced Coverage
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Profile gas company, was said to have been attached to the project.

Azerbaijani officials in Tabriz reportedly will work to hamper
plans for the pipeline, according to a report from the PanArmenian
Network. Baku, the Azerbaijan capital, refuted reports that Armenia
would host the Western-backed Nabucco pipeline, UPI said.

It is unclear if the Armenia-Iran pipeline would be part of the
planned Nabucco pipeline, which is slated to move natural gas from
Turkey to Austria via Bulgaria, Romania and Hungary.

Construction on Nabucco has yet to begin.

Baku’s objection to an Armenia-Iran pipeline likely stems from
territorial disputes over the Nagorno-Karabakh region, as well as
potential issues over competition to oil- and gas-rich Azerbaijan.