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Armenian-Iranian pipeline project put back to year-end

Yerevan. (Interfax) – Construction of the Armenian stretch of the Iran – Armenia gas pipeline will not now begin until December this year, the Armenian Energy Ministry told Interfax.

Work on the Armenian stretch of the pipeline was due to start late October, but was delayed because preparations were not complete.

The ministry said dignitaries from Iran and Armenia would attend a ceremony to mark the beginning of the project in December close to the Armenian city of Meghri. It is expected that the first two kilometers of the Meghri – Kajaran pipeline will be built. Iran’s Sanir will lay the pipeline.

An official at Gazprom said last week that the Russian gas giant was considering a role in the construction of a gas pipeline from Iran to Armenia. But the Armenian ministry said this was unlikely as the project does not promise high returns.

Iran signed a deal to supply Armenia with 36 billion cubic meters (bcm) of gas per year over 20 years with the possibility of extending this by five years and gas supplies to 47 bcm in May this year.

Work on Iran’s 100-km stretch began in June. The Iranian Export and Development Bank set aside $30 million to finance the Armenian stretch.

It will cost a total of $210 million-$220 million to build the new pipeline and renovate the existing Kajaran – Yerevan pipeline. Iranian gas should start reaching Armenia by January 2007. All of the gas will be used by power stations to generate electricity, some of which will be exported to Iran and some of which will be consumed in Armenia itself.

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