May 22, 2024
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Politics RENEWABLE ENERGY

Armenia Turns to Iran, to Reduce Energy Dependence on Russia

As Armenia gradually turns away from its traditional strategic ally, Russia, it is tentatively exploring deeper partnerships with Iran as well as the likes of France and the United States.

OilPrice.com revealed that Tehran and Yerevan have enjoyed cordial relations since the early 1990s.

As Armenian Security Council Secretary Armen Grigoryan told Armenian Public Television trade between Armenia and Iran is booming. Where the countries traded $350 million worth of goods in 2021, the expectation is that this figure will rise to $1 billion by next year, he said.

“Economic relations between the two countries are important from the standpoint of security,” he said.

Another interview from a few days earlier, this time given by Iran’s newly appointed ambassador to Armenia, Mehdi Sobhani, to independent Yerevan-based news outlet CivilNet, offered more context for that perspective.

Sobhani hinted at the idea of Iran reducing Armenia’s energy dependence on Russia. In a mutually advantageous deal, the two countries agreed in August to extend an existing deal whereby Armenia provides Iran with electricity in return for natural gas supplies. This arrangement has been in place since 2009 and was due to end in 2026, but will now be rolled on, in an apparently enhanced form, until at least 2030.

“Thanks to that agreement, we will be able to increase imports of electricity from Armenia to Iran in exchange for gas, triple or even quadruple it,” Sobhani said.

However, while this idea is promising, Russia can still play the spoiler. The Iran-Armenia gas pipeline, the very instrument that could be used to wean Armenia off Moscow’s gas, has belonged to Russian gas giant Gazprom since 2015. Russia has precedent in constraining the potential of this route.

Even as the pipeline was being designed, Moscow successfully insisted that its diameter be limited to 700 millimeters – less than the originally intended 1,420 millimeters – as a way to ensure no excess volumes of Iranian gas would be sold onward to third countries. This technical fix limited the pipeline’s volume to 2.3 billion cubic meters per year. Ultimately, Gazprom bought Armenia’s entire gas distribution infrastructure outright.

 

 

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