Armenia Pushes for Major Increase in Iranian Gas Imports Despite Russian Pressure

Armenia is seeking to significantly increase natural gas imports from Iran - sign for a push to deepen energy cooperation with its southern neighbor while insisting the effort is based on economic interests rather than geopolitical pressure.

Infrastructure Minister Davit Khudatyan confirmed the government's plans Tuesday after returning from talks in Tehran, where Armenian and Iranian officials agreed to begin work on expanding their existing energy partnership.

Khudatyan rejected suggestions that the initiative is connected to Russia's recent warnings that Armenia could lose its discounted natural gas prices if it continues strengthening ties with the European Union.

"This decision has nothing to do with any other country, particularly the Russian Federation," Khudatyan said. "It is an economically beneficial project that both Armenia and Iran are interested in developing."

During the visit, Khudatyan met with Iranian Vice President Hamid Pourmohammadi and Oil Minister Mohsen Paknejad. The two sides agreed to establish a joint working group to develop practical steps for increasing energy cooperation.

At the center of those discussions was the long-running gas-for-electricity swap agreement between the two countries. Under the arrangement, Iran exports natural gas to Armenia, and Armenia compensates by supplying electricity generated from that fuel.

According to Khudatyan, both governments see room for substantial growth.

"Armenia needs to receive more gas, and Iran needs to receive more electricity," he said, adding that the existing gas pipeline connecting the two countries is operating below its maximum capacity.

The minister said the volume of gas exchanged under the agreement could at least double once a third high-voltage transmission line linking Armenia and Iran is completed. The long-delayed project is expected to be finished before the end of this year.

Armenia imported less than 500 million cubic meters of Iranian natural gas last year, compared with about 2 billion cubic meters of Russian gas delivered through Georgia. Russia remains Armenia's dominant energy supplier.

Energy expert Ara Marjanyan has said Iranian gas currently costs Armenia roughly twice as much as Russian gas. Even so, he argues that the swap mechanism remains advantageous because Armenia pays with electricity instead of direct cash, reducing the financial burden of the higher price.

Russia has supplied Armenia with natural gas at below-market rates for years. In recent months, however, Moscow has warned that those preferential prices could be reconsidered if Yerevan continues moving closer to the European Union.

If the planned expansion moves forward, it would mark one of the most significant increases in Armenia-Iran energy cooperation in years, giving Armenia greater flexibility in its energy strategy while maintaining its existing imports from Russia.

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