PIPELINE PERKS FOR RUSSIA IN ARMENIA-IRAN ENERGY DEAL
Expanding Armenia’s energy sources is a critical goal for the administration of President Robert Kocharian – for both economic and political reasons. Chronic energy shortages contributed to much of the country’s economic decline after the collapse of the Soviet Union, and Armenia’s economic woes continue to attract the criticism of the country’s opposition.
Oil could reinforce Tehran’s ties with Yerevan still further. At a December 4 meeting between Armenian Defense Minister Serzh Sarkisian and Iran’s Armenian Ambassador Alirza Hagigian, plans were discussed for construction of a 60-kilometer oil pipeline from the Iranian town of Julfa to the Armenian border town of Meghri.
Geopolitics, though, rather than the attractions of the Armenian energy market, appears to drive much of Iran’s push for partnership. With American troops stationed in neighboring Afghanistan and Iraq and Iran’s nuclear energy program under intense international scrutiny, the country’s ruling clerics have taken steps to assure the outside world that the Islamic Republic is a force for stability in the region. Iranian President Mohammad Khatami’s September 2004 visit to Armenia, a close US ally, reinforced that campaign with a "good neighbor" message that "Iran is interested in peace and stability in the South Caucasus."
But in drawing closer to Iran, Yerevan has risked alienating another longtime ally – Russia. In Yerevan, Kremlin concerns about the prospect of Armenia providing a conduit for Iranian gas to Europe, a key Russian market, are widely believed to have resulted in a reduction of the pipeline’s size to a width too narrow for exports.