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YEREVAN WANTS TO OPEN UP TO IRAN
EurasiaNet.org
http://www.eurasianet.org/node/64910
Jan 26 2012
NY
As the European Union, the United States and a host of other nations
gear up to cut Iran off, Armenia is pursuing joint projects with
Tehran that could potentially open new conduits to the outside world.
On January 23, the EU decided to impose an embargo on Iranian oil,
to start in July, provided Tehran continues to obstruct international
efforts to monitor its nuclear program. The United States, meanwhile,
in late December tightened its sanctions on Iran.
A nation like Armenia, which receives tens of millions of dollars
annually in US assistance, might be expected to quickly align itself
behind the Western-spearheaded embargo. But Armenia has been itself
blockaded since the early 1990s by two of its four neighbors, Turkey
and Azerbaijan. Given that circumstance, policymakers in Yerevan view
Iran as a lifeline.
The centerpiece of Armenian-Iranian cooperation is a planned
365-kilometer-long oil pipeline, which would originate in Tabriz and be
capable of delivering 1.5 million liters of gasoline and diesel daily
to the southwestern Armenian town of Yeraskh. Work on the pipeline,
estimated to cost $160 million -$180 million, is slated to begin
this year, and to be completed by 2014. Tehran has agreed to pay for
the section of the oil pipeline that runs through Iranian territory;
Yerevan would cover the Armenian section.
US sanctions can target a $20-million-plus investment "that directly
and significantly contributes to the enhancement of Iran's ability to
develop petroleum resources," as well as related interactions with
certain Iranian financial institutions, such as the Central Bank of
the Islamic Republic of Iran. But, even as the Obama administration
intensifies efforts to rally countries around the Iran embargo,
no official word appears to have been given on whether the
Iranian-Armenian oil pipeline project is "sanctionable."
At present, Armenian leaders say the international embargo campaign
against Iran won't stop Yerevan's plan to build the pipeline,
which experts at the Armenian Energy Ministry estimate will save
the country up to 30 percent per year in energy costs. "They [Iran]
always have problems, but we continue to work," Energy and Natural
Resources Minister Armen Movsisian told EurasiaNet.org. The project,
he added, will begin "soon."
Movsisian did not specify whether or not the Armenian government has
discussed with Washington how the sanctions would apply to the Iranian
oil pipeline, or other Armenian projects with Iran. The US Embassy
in Yerevan did not respond to questions from EurasiaNet.org in time
for publication. An alleged 2006 cable from the embassy, published by
Wikileaks, noted that it would be "extremely difficult" for Armenia
to agree to US sanctions against Iran, "given the critical energy
links between the two counties and Armenia's geo-political situation."
Representatives from Armenia's Ministry of Foreign Affairs and
Ministry of Economy declined to comment on the prospects for any of
the country's projects with Iran.
Armenia already makes use of a 140-kilometer-long natural gas
pipeline from Iran that has a delivery capacity of 2.3 billion cubic
meters per year. A hydropower project and a railway project, both
dependent on Iranian financing, are also in the works. A 2.64-megawatt
Iranian-Armenian wind farm exists in the northern region of Lori.
As it has for the gas pipeline, some Armenian analysts believe that
Washington will turn a blind eye to the potential construction of
a Tabriz- Yeraskh pipeline. Energy cooperation with Iran has been
touted by Armenia as a way to diversify its energy supplies away from
Russia - a key regional priority for the United States. "Because the
West is well aware of the fact that Armenia, not by its fault, is in
a two-sided blockade, and in the case of war [against Iran] might
find itself up against a wall, a more lenient approach is shown to
us, and under these circumstances, the projects might be continued,"
argued Armenian National Academy of Sciences senior researcher Gohar
Iskandarian, an Iranian studies specialist.
By contrast, a gas pipeline from Pakistan to Iran has produced
discussions on how the project could affect US aid to Islamabad,
the US State Department announced on January 3. The Russia factor is
most likely why Armenia's own Iranian pipeline has not led to similar
discussions about the status of Yerevan's roughly $40 million in
aid from the United States. That factor also appears to play a role
elsewhere in the region.
On January 23, The Wall Street Journal cited an unidentified
congressional aide as saying that US legislators would agree to exempt
the BP-led Shah Deniz II natural gas project in the Caspian Sea from
sanctions, even though it involves a minority Iranian stake. The
Journal reported the aide as saying that a "broad-based consensus"
exists in the US Congress "that our sanctions policy should impose
maximum economic pain on the Iranians without allowing Russia to hold
Eastern Europe hostage for energy supplies."
In the wake of the European Union's decision to ban new oil contracts
with Iran and freeze Iranian Central Bank assets, questions are
arising about Tehran's ability to finance any of its Armenian
projects. Stepan Safarian, a former political analyst who now heads
the opposition Heritage Party's parliamentary faction, believes
efforts to tighten an international embargo could spur Iran to
cooperate with Armenia. "Iran's priority today is to break through
the isolation surrounding it, and, for that, Iran might put aside
economic interests and implement the projects purely out of a political
motivation," reasoned Safarian, who attributed Iranian President
Mahmoud Ahmadinejad's December 23 visit to Yerevan to such an interest.
During his trip, the Iranian leader asserted that no "negative
or prohibiting circumstance ... could hinder the development of
[bilateral] relations."
Iskandarian, the Iran expert, reasons that if Tehran lacks funds
to pursue the projects with Armenia, Iranian leaders could look
for private financing, or possibly obtain investments from China or
India, two countries which oppose US sanctions and which have evolving
interests in the South Caucasus.
Similarly, Energy Minister Movsisian maintains that international
wariness toward Iran is unlikely to frustrate Armenia's plans to use
private investors to finance its own $100-million share of the oil
pipeline project. "It won't be hard to raise the money," he said.
"This project has great economic prospects and so finding investors
is not a problem."
Editor's note: Gayane Abrahamyan is a reporter for ArmeniaNow.com
in Yerevan.
From: Emil Lazarian | Ararat NewsPress
EurasiaNet.org
http://www.eurasianet.org/node/64910
Jan 26 2012
NY
As the European Union, the United States and a host of other nations
gear up to cut Iran off, Armenia is pursuing joint projects with
Tehran that could potentially open new conduits to the outside world.
On January 23, the EU decided to impose an embargo on Iranian oil,
to start in July, provided Tehran continues to obstruct international
efforts to monitor its nuclear program. The United States, meanwhile,
in late December tightened its sanctions on Iran.
A nation like Armenia, which receives tens of millions of dollars
annually in US assistance, might be expected to quickly align itself
behind the Western-spearheaded embargo. But Armenia has been itself
blockaded since the early 1990s by two of its four neighbors, Turkey
and Azerbaijan. Given that circumstance, policymakers in Yerevan view
Iran as a lifeline.
The centerpiece of Armenian-Iranian cooperation is a planned
365-kilometer-long oil pipeline, which would originate in Tabriz and be
capable of delivering 1.5 million liters of gasoline and diesel daily
to the southwestern Armenian town of Yeraskh. Work on the pipeline,
estimated to cost $160 million -$180 million, is slated to begin
this year, and to be completed by 2014. Tehran has agreed to pay for
the section of the oil pipeline that runs through Iranian territory;
Yerevan would cover the Armenian section.
US sanctions can target a $20-million-plus investment "that directly
and significantly contributes to the enhancement of Iran's ability to
develop petroleum resources," as well as related interactions with
certain Iranian financial institutions, such as the Central Bank of
the Islamic Republic of Iran. But, even as the Obama administration
intensifies efforts to rally countries around the Iran embargo,
no official word appears to have been given on whether the
Iranian-Armenian oil pipeline project is "sanctionable."
At present, Armenian leaders say the international embargo campaign
against Iran won't stop Yerevan's plan to build the pipeline,
which experts at the Armenian Energy Ministry estimate will save
the country up to 30 percent per year in energy costs. "They [Iran]
always have problems, but we continue to work," Energy and Natural
Resources Minister Armen Movsisian told EurasiaNet.org. The project,
he added, will begin "soon."
Movsisian did not specify whether or not the Armenian government has
discussed with Washington how the sanctions would apply to the Iranian
oil pipeline, or other Armenian projects with Iran. The US Embassy
in Yerevan did not respond to questions from EurasiaNet.org in time
for publication. An alleged 2006 cable from the embassy, published by
Wikileaks, noted that it would be "extremely difficult" for Armenia
to agree to US sanctions against Iran, "given the critical energy
links between the two counties and Armenia's geo-political situation."
Representatives from Armenia's Ministry of Foreign Affairs and
Ministry of Economy declined to comment on the prospects for any of
the country's projects with Iran.
Armenia already makes use of a 140-kilometer-long natural gas
pipeline from Iran that has a delivery capacity of 2.3 billion cubic
meters per year. A hydropower project and a railway project, both
dependent on Iranian financing, are also in the works. A 2.64-megawatt
Iranian-Armenian wind farm exists in the northern region of Lori.
As it has for the gas pipeline, some Armenian analysts believe that
Washington will turn a blind eye to the potential construction of
a Tabriz- Yeraskh pipeline. Energy cooperation with Iran has been
touted by Armenia as a way to diversify its energy supplies away from
Russia - a key regional priority for the United States. "Because the
West is well aware of the fact that Armenia, not by its fault, is in
a two-sided blockade, and in the case of war [against Iran] might
find itself up against a wall, a more lenient approach is shown to
us, and under these circumstances, the projects might be continued,"
argued Armenian National Academy of Sciences senior researcher Gohar
Iskandarian, an Iranian studies specialist.
By contrast, a gas pipeline from Pakistan to Iran has produced
discussions on how the project could affect US aid to Islamabad,
the US State Department announced on January 3. The Russia factor is
most likely why Armenia's own Iranian pipeline has not led to similar
discussions about the status of Yerevan's roughly $40 million in
aid from the United States. That factor also appears to play a role
elsewhere in the region.
On January 23, The Wall Street Journal cited an unidentified
congressional aide as saying that US legislators would agree to exempt
the BP-led Shah Deniz II natural gas project in the Caspian Sea from
sanctions, even though it involves a minority Iranian stake. The
Journal reported the aide as saying that a "broad-based consensus"
exists in the US Congress "that our sanctions policy should impose
maximum economic pain on the Iranians without allowing Russia to hold
Eastern Europe hostage for energy supplies."
In the wake of the European Union's decision to ban new oil contracts
with Iran and freeze Iranian Central Bank assets, questions are
arising about Tehran's ability to finance any of its Armenian
projects. Stepan Safarian, a former political analyst who now heads
the opposition Heritage Party's parliamentary faction, believes
efforts to tighten an international embargo could spur Iran to
cooperate with Armenia. "Iran's priority today is to break through
the isolation surrounding it, and, for that, Iran might put aside
economic interests and implement the projects purely out of a political
motivation," reasoned Safarian, who attributed Iranian President
Mahmoud Ahmadinejad's December 23 visit to Yerevan to such an interest.
During his trip, the Iranian leader asserted that no "negative
or prohibiting circumstance ... could hinder the development of
[bilateral] relations."
Iskandarian, the Iran expert, reasons that if Tehran lacks funds
to pursue the projects with Armenia, Iranian leaders could look
for private financing, or possibly obtain investments from China or
India, two countries which oppose US sanctions and which have evolving
interests in the South Caucasus.
Similarly, Energy Minister Movsisian maintains that international
wariness toward Iran is unlikely to frustrate Armenia's plans to use
private investors to finance its own $100-million share of the oil
pipeline project. "It won't be hard to raise the money," he said.
"This project has great economic prospects and so finding investors
is not a problem."
Editor's note: Gayane Abrahamyan is a reporter for ArmeniaNow.com
in Yerevan.
From: Emil Lazarian | Ararat NewsPress