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Iran wants to revise gas-for-electricity trade agreement with Armenia

Business Materials 5 October 2015 11:57 (UTC +04:00)

Baku, Azerbaijan, Oct. 5

By Umid Niayesh - Trend:

The Islamic Republic has the capacity to export some 2.3 billion cubic meters of gas to Armenia per year, Alireza Kameli, managing director of the National Iranian Gas Export Company said.

The official said that Tehran currently exports on average one million cubic meters of gas to Armenia while the gas pipeline's operational capacity is over six million cubic meters per day.

Armenia is not able to use the pipeline's full capacity due to lack of infrastructures, Kameli said, the Iranian oil ministry's official SHANA news agency reported Oct. 5.

Iran and Armenia discussed the issue during the meeting of the Islamic Republic Oil Minister Bijan Namdar Zanganeh and Armenian Minister of Energy and Natural Resources Yervand Zakharyan in Tehran, he added.

Kameli further said a third electricity transmission line between the two country is under construction and Armenia plans to build a combined cycle power plant which Zakharyan has asked Iran to guarantee providing it with gas.

In 2004, the Armenian government initiated construction of Iran-Armenia gas pipeline. The pipeline started operating in 2007.

Armenia uses Iranian gas for generating electricity, which is sent to Iran, three kilowatt-hour of electricity for one cubic meter of natural gas. Under the agreement, Iran will send 36 billion cubic meters of natural gas to Armenia for 20 years. The terms of the agreement can be prolonged for five years and gas import can be increased to 47 billion cubic meters.

Kameli underlined that the rate of three kilowatt-hour of electricity for one cubic meter of natural gas should be revised. He added that the parties would start negotiations on the issue without disclosing further details.

Follow the author on Twitter: @UmidNiayesh

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