IRAN FINES ARMENIA FOR VIOLATIONS OF TAKE-OR-PAY GAS AGREEMENT

APA
Nov 6 2009
Azerbaijan

Baku – APA-ECONOMICS. Iran is delivering 1 to 1.2 million cubic meters
of natural gas to Armenia a day in exchange for an equivalent amount
of electricity under a contractual agreement, said Rasoul Salmani,
engineering and technical services director of Iran’s National Gas
Export Company (NIGEC).

In his words, the Iranian side is technically ready to increase the
daily volume to 3 million cubic meters a day but can’t do this because
of Armenia’s dragging feets.

"Because this is a take or pay agreement, the Armenian side should pay
Iran a fine. This is due to the fact that despite Iran’s willingness
to supply more gas in accordance with the agreement, Armenia takes
lessen than the planned gas volumes," he added.

A take or pay principle is a contractual agreement in which one party
agrees to purchase a specific amount of gas or to pay the equivalent
cost even if the specified amount of gas is not needed.

The amount of penalty will be fixed and Armenia will be informed of
this, he noted.