HIGHER GAS EXPORTS TO ARMENIA SUGGESTED BY IRAN
Samuel Ciszuk

World Markets Research Centre
Global Insight
October 29, 2009

Iran is planning to boost its gas exports to neighbouring Armenia
by five times in the near future, Valiollah Dini, an official at the
Iranian Gas Transmission Co. (IGTC) told Reuters yesterday, clarifying
that "the plan aims to increase current gas exports of 2 million cubic
metres a day to 10 million". The news come as Iran is making a push to
revive efforts to export gas to neighbours in the Gulf–particularly
Bahrain–and to Turkey, in the latter case eyeing potential re-exports
from Turkey onwards to southern and Central Europe.

Significance:Iran has been struggling to feed its own domestic demand
over the electricity and heating peak demand periods of the past few
years, which has caused shortages–and a need to renege on previous
export volume commitments. Hence, Iran’s exports to Armenia have been
far lower than the 2.3 bcm/y (6.3 mmcm/d) targeted under the current
deal. In fact the unreliability of Iranian supplies has driven Armenia
to develop Russian gas imports as its main gas feedstock, using the
Iranian flows more as a top-up option and renewed talks of Iranian
gas volumes have not managed to sway the Armenians from mulling
increases in their nuclear generation capacity. In fact, despite
Iranian intentions to portray their future capabilities in the best of
lights, little points towards Iran being able to reliably deliver its
intended increase during the upcoming winter peak electricity demand
season (December to March) this year or the next, as international
sanctions have thwarted the necessary inflow of upstream investments
and made its badly needed fuel imports–which it practically gives
away domestically at heavily subsidised prices–even more expensive

From: Emil Lazarian | Ararat NewsPress