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Armenia, Iran Sign MoU To Increase Energy Sector Co-Operation

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  • Armenia, Iran Sign MoU To Increase Energy Sector Co-Operation

    ARMENIA, IRAN SIGN MOU TO INCREASE ENERGY SECTOR CO-OPERATION
    BYLINE: Andrew Neff

    Global Insight
    June 1, 2011

    Armenia and Iran have signed a memorandum of understanding (MoU)
    geared to increase their co-operation in the energy sphere, including
    joint construction of a third electricity transmission line between the
    two neighbouring countries. Armenia's ARKA news agency reports that a
    transmission cable with a capacity of between 500MW to 800MW would be
    built to facilitate increased power trading between the Armenian and
    Iranian grids. Iran's IRNA news agency said that construction of the
    transmission cable, which Iranian energy minister Majid Namjoo said
    would cost approximately USD110 million, would begin within two weeks,
    with the line slated to be completed and operational by mid-2012. Also,
    Armenian energy minister Armen Movsisyan said that costs for a planned
    180-MW hydropower plant (HPP) on the Arax River, which divides Iran
    and Armenia, have risen to between USD450 million to USD500 million,
    up from an earlier estimate of USD323 million (seeArmenia - Iran:
    17 September 2010:).

    Significance:The energy sector MoU was signed in the context of the
    latest joint economic committee meeting between representatives of
    the two countries' governments. The agreement on the new transmission
    line follows a deal earlier this year that will see construction of a
    365-km fuel pipeline connecting Armenia and Iran (seeArmenia - Iran:
    16 February 2011:). Economic co-operation between the two countries,
    particularly in the energy sector, has increased in recent years as
    Iran's political isolation has increased due to tighter international
    sanctions against the ruling regime over its controversial nuclear
    programme, while the Turkish-Azeri blockade of Armenia has increased
    that country's dire energy situation, prompting Armenia to turn to Iran
    for more of its energy needs. Armenia and Iran previously inaugurated
    a gas pipeline connection that allows Armenia to import gas from Iran,
    reducing Armenia's vulnerability to disruptions in Russian gas imports,
    which must first transit Georgia before entering Armenia.



    From: Emil Lazarian | Ararat NewsPress
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