Iran Looks To Boost Gas Supplies To Armenia

The Armenian and Iranian governments are exploring the possibility of expanding a swap arrangement allowing Armenia to import Iranian natural gas, Deputy Prime Minister Mher Grigorian said on Tuesday.

Under the commercial scheme launched a decade ago, Iran has supplied up to 500 million cubic meters of gas to Armenia annually. The latter pays for it with electricity delivered to the Islamic Republic.

The rest of Armenia’s gas imports totaling roughly 2 billion cubic meters per annum come from Russia. According to the current and former Armenian governments, Russian gas has been cheaper, in monetary terms, for the South Caucasus state than Iranian gas.

Speaking after talks with Grigorian held in Tehran last week, Iranian Energy Minister Reza Ardakanian said that his country is ready to increase the gas supplies and also accept other Armenian “goods” in payment for them.

Grigorian confirmed that the Iranian side floated the idea during the talks. “Such an issue was discussed and negotiations regarding this will certainly continue,” he told RFE/RL’s Armenian service. “We expect that a group of Iranian specialists will visit Yerevan soon and I think that discussions on this issue will continue.”

“This topic needs further elaboration because it is quite interesting in itself,” said the Armenian vice-premier.

Grigorian said the Armenian government is interested in greater gas supplies from Iran because it believes they could cut domestic prices of gas and electricity. He made clear that “the most desirable option” for Yerevan is to continue to pay for Iranian gas with electricity, rather than other goods.

Armenia is currently building a third high-voltage transmission line that will connect Armenian and Iranian power grids. The new line, slated for completion next year, will allow it to almost triple power supplies to Iran.

While in Tehran, Grigorian also met with Iranian President Hassan Rouhani. The latter told him that the two neighboring nations should deepen their relations despite the U.S. economic sanctions against Tehran.

The gas issue was high on the agenda of Prime Minister Nikol Pashinian’s February 2018 visit to Iran. Speaking after talks with Pashinian, Rouhani expressed Tehran’s readiness to sell more gas to Armenia.