Armenia, Iran, Russia to open talks on oil refinery

Armenia Materials 18 April 2007 13:40 (UTC +04:00)

( Armenialiberty ) - Government officials from Armenia, Iran and Russia will meet soon to discuss an ambitious idea to build a big oil refinery on the Armenian-Iranian border that would cater for the Iranian market.

President Robert Kocharian reportedly discussed the multimillion-dollar project with senior Russian officials during a visit to Moscow in January. A subsidiary of Russia's state-run Gazprom gas monopoly said afterwards that it is considering investing an estimated $1.7 billion needed for the construction of the would-be refinery near the Armenian border town of Meghri.

Reports in the Russian press have said the facility would have an annual capacity to refine up to 7 million tons of Iranian oil that would be pumped into Armenia through a special pipeline to be built in northwestern Iran. Petrol produced by it would then be shipped back to Iran by rail. Construction of the 200-kilometer pipeline and the railway would require hundreds of millions of dollars in additional funding. Armenia and Iran have no rail links at present.

The Russian Regnum news agency quoted Armenia's Deputy Energy Minister Areg Galstian as saying that officials from the three governments will try to "ascertain the scale of each party's participation in the project." Galstian did not give further details of the talks.

Despite its vast oil reserves, Iran lacks refining capacities and has to import gasoline to meet domestic demand. Nonetheless, some Russian experts have questioned the economic wisdom of the project, arguing that oil refineries are usually located near sea ports or major oil pipelines. They see political motives behind the idea of building such a facility in landlocked Armenia.