Armenia and Iran to Build Fuel Pipeline

Construction will begin this year of a pipeline taking oil from Iran to Armenia, boosting the isolated ex-Soviet state's energy security, the Armenian energy minister said on Tuesday.

The 365-kilometre (227-mile) pipeline from the Iranian city of Tabriz to Eraskh in Armenia follows the opening of a gas pipeline from Iran and will provide the country with an alternative to Russian energy imports, which were disrupted by the Georgia-Russia war in 2008.

"The diversification of energy sources is a guarantee of our country's energy security," minister Armen Movsisian told a news conference.

"The pipeline will provide the country with stable fuel imports," he said.

After the pipeline is completed in 2013, Armenia will receive 1.5 million liters of Iranian petrol and diesel fuel a day for 25 years, the minister said.

Each country is to bear the cost of building its section of the pipeline, with the Armenian section expected to cost 100 million dollars (74 million Euros).

Yerevan had originally hoped that construction of the pipeline would begin in 2009, but the project ran into delays.

"Before the end of the year we will resolve problems connected with the cost of fuel, technical parameters and sources of finance, and we will be able to start construction," Movsisian said.

Landlocked Armenia has been seeking alternative import routes since the 2008 war delayed fuel cargos at ports in neighboring Georgia, causing shortages in the country, the minister said.

Yerevan has also been cultivating closer energy links with Tehran because of an economic blockade imposed by its other neighbors, Azerbaijan and Turkey, in retaliation for Yerevan's role in the continuing conflict over the disputed region of Nagorny Karabakh.

But Iran's deepening relationship with Armenia has further infuriated Azerbaijan, which is also a mainly Shiite Muslim country.

Azerbaijanis have held protests outside the Iranian embassy in Baku in recent weeks, demanding an end to the Islamic republic's cooperation with their bitter enemy.