Page 9 - MEOG Week 44
P. 9
MEOG PoLICy MEOG
Iranian, Armenian ministers affirm gas and electricity barter
Iran
IRaN’S Petroleum Minister Bijan Namdar Zangeneh and armenia’s Minister of Territo- rial administration and Infrastructure Suren Papikyan met on November 3 and discussed the exchange of natural gas and electricity between their neighbouring countries.
Zangeneh described the energy sector as the most important field in relations and exchanges between Iran and armenia, according to local news outlets. Small, impoverished armenia has to date not encountered significant objections from uS Trump administration sanctions offi- cials over its continued level of business with its far larger neighbour. Given that Yerevan has no diplomatic relations with either azerbaijan or Turkey, Iran has a vital role to play in sustaining and building the armenian economy.
“Iran’s export of gas to armenia in exchange for importing electricity is part of mutual coop- eration,” Zangeneh was cited as affirming.
Iran and armenia signed a barter deal on trading gas for electricity for 20 years in 2004. under the arrangement, Iranian gas is consumed by power plants in armenia and armenian elec- tricity flows to Iran under a barter. armenia started to import gas from Iran in mid-2009.
armenia’s position however, landlocked between Iran, azerbaijan, Turkey and Georgia, is particularly difficult.
With few natural resources of its own and its borders with azerbaijan and Turkey long closed as a result of conflict in the Nagorno Karabakh region, armenia is dependent on imports of both petroleum products and gas.
Since the previous uS sanctions regime, product imports from Iran have dwindled and
been replaced by imports of largely Russian products via Georgia. Meanwhile, Yerevan still leans on the Soviet era Metsamor Nuclear Power plant for up to 40% of its electricity.
The bulk of imports still arrive from Russia via Georgia, although this route has proved unre- liable, and heavily dependent on Russo-Geor- gian relations, not least during the short lived Russo-Georgian war of 2008. Yerevan and Gaz- prom have also long been at odds over the price the latter charges for its gas.
In addition, armenia still imports gas from Iran, with around 0.4bn cubic metres being imported during 2017 in a barter deal in exchange for armenian electricity supplied to north-west Iran.
Neighbouring azerbaijan has for several years been importing gas from Iran over two separate borders.
The azeri enclave of Nakhchivan, sand- wiched between Iran and armenia with a tiny border with Turkey, is completely separated from the bulk of azerbaijan. Since the collapse of the Soviet union, and the war between azerbaijan and armenia, it has been dependent on Iran for imports of gas and petroleum products.
as a 2010 agreement with Turkey for the construction of a gas pipeline link to the Turkish network has yet to be implemented, the enclave will for the foreseeable future need to look to Iran for its gas needs.
azeri officials have suggested that future deals will be conducted on a barter basis, as opposed to involving financial transfers, a move which should allow them to circumvent Washington’s financial sanctions.
Week 44 05•November•2019 w w w . N E W S B A S E . c o m P9
