17 November Mediamax news agency, Yerevan

Fate of Iran-Armenia gas pipeline up in the air - Armenian agency

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The Yerevan media have almost ignored the report that the Armenian government approved on 15 November the draft Armenian-Iranian agreement "On the transit of Turkmen gas to Armenia through Iran", which, among other documents, is to be signed during the official visit by President Robert Kocharyan to Tehran scheduled for late December.

Ukraine, which has been showing interest in the Iran-Armenia gas pipeline for the past two or three years, might become another important "player" in the project. The Iranian gas price did not suit either Yerevan or Kiev. Now that there is an agreement on the transit of Turkmen gas, Ukraine might become even more interested. Traditionally, Turkmen gas integrated into the Soviet gas industry constituted a considerable portion of the gas consumed in Ukraine.

The Ukrainian and Turkmen presidents signed an agreement on 4 October 2000 under which Turkmenistan is to deliver 30bn cu.m. of gas to Ukraine in 2001. Gas supplies commenced on 1 November 2000, and Russia's Itera was the operator of the project. Relations between Ukraine and Itera are more than complicated, and the reason for its interest in the Iran-Armenia gas pipeline, which could in future go further on to Europe, is most likely a reflection of its desire not to be wholly dependent on Russia and Itera.

However, it is early to draw very optimistic conclusions. Armenian diplomats say that in the implementation of the project, it is quite important to get Georgia's consent to lay the pipeline further to Europe through its territory. Tbilisi has not been showing any enthusiasm so far, which can prevent the participation of the European Union and international financial institutions, which, despite their obvious interest in the project, will hardly invest in a pipeline ending in Armenia. The peculiarity of the situation is that one of the main reasons for Yerevan's interest in the project is the fact that today Armenia is receiving gas only from Georgia. In the event of force majeure, Armenian leaders believe that gas supplies are very likely to be cut off completely.

Georgia signed an agreement with Azerbaijan quite recently on the construction of a pipeline for the transit of Azerbaijani gas to Turkey, which was actively backed by the USA. Therefore, Tbilisi would hardly agree on a rival deal. Hence, the fate of the Iran-Armenia gas pipeline project, where the direct and indirect interests of many countries clash, is not clear yet. Apparently, Robert Kocharyan's visit to Tehran will put dots on all the i's.

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