Armenia to import oil from Iran

It has been announced that the construction of a pipeline that will transport oil from Iran to Armenia will begin this year.

The 365 km (227 mile) pipeline, which will begin in the Iranian city of Tabriz and end in Eraskh in Armenia, will allow the country to import oil products from both from Iran and the Persian Gulf, providing an alternative to Russian energy imports, which were disrupted by the Georgia-Russia war in 2008.

There is already a natural gas pipeline between Iran and Armenia, which receives some of its gas supplies from Iran. The land-locked South Caucasus country, however, relies mainly on Russian natural gas that reaches Armenia also through pipeline traversing Georgia.

Armenia’s annual demand for refined oil products currently stands at around 400 000 t. After the pipeline is completed in 2013, Armenia will receive 1.5 million litres per day of Iranian petrol and diesel fuel for 25 years, greatly improving its energy security. In addition, Persian Gulf market prices significantly differ from those at Mediterranean Sea, which will enable Armenia to dramatically decrease transportation expenses.

Each country will bear the cost of building its own section of the pipeline, with the Armenian section expected to cost US$ 100 million (EUR 74 million).

It was originally hoped that construction of the pipeline would begin in 2009, but the project ran into delays. The pipeline in scheduled for completion in 2014.

The plans have prompted protests from MPs and political parties in Baku, which has imposed a blockade on Armenia over its occupation of Azerbaijan's Nagorno-Karabakh autonomous region and surrounding districts. Members of the Milli Majlis and the World Azerbaijani Congress have urged ethnic Azerbaijanis in Tabriz to oppose the project.

In recent years, Iran and Armenia have expanded cooperation in different fields, particularly through swapping electricity for natural gas. Iran mainly exports natural gas to Armenia and imports power supplies from the Caucasian state through two transfer lines with a total power transfer capacity of 220 kw/hr at present.

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