Araştırma Makalesi

 
 
 

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Çankırı Karatekin Üniversitesi 
İktisadi ve İdari Bilimler 
Fakültesi Dergisi 
Cankırı Karatekin University 
Journal of the Faculty of Economics 
and Administrative Sciences 
3. Purchase and Sale of Natural Gas and Cooperation in the Field of Transit: 
Opportunities and Threats 
Back in 1992, Armenia and Iran signed an agreement on the construction of a 
natural gas pipeline. However, due to serious economic and financial difficulties 
during this period, both sides needed foreign financial support. Although the $120 
million natural gas pipeline was expected to be completed in 1995, there were some 
technical and financial problems. The construction work could not be completed on 
time. The pipeline, with a capacity of 1 billion m3 of natural gas per year, was 
expected to be 141 km long. 100 km of it would pass through Iran and 41 km 
through Armenia 
(Cabbarlı, 2012, p.158). 
Another agreement on the construction of the Iran-Armenia gas pipeline was signed 
in 1995. Two years later, the two countries signed an agreement for transport 
Iranian gas. According to the agreement, 1 million cubic meters of gas will be 
delivered to Armenia annually for 15 years. However, due to the lack of sufficient 
financial credit, the project could not be fully implemented at that time 
(Arjmend&Douletyari, 1391, p. 208). This project has remained on paper for the 
first ten years after Armenia's independence. 
The geopolitical processes that took place in 2001 led to real steps to be taken to 
develop this cooperation. Joint documents signed by the leaders of the United 
States, Turkmenistan, Azerbaijan, Georgia, Kazakhstan, and Turkey at the OSCE 
summit in Istanbul in November 1999 expressed support for the Baku-Tbilisi-
Ceyhan project and along with this, they acquired the agreement on the construction 
of the pipeline exporting natural gas from Shahdeniz deposits to Erzurum. The 
Islamic Republic of Iran has made no secret of its unwillingness to implement US-
led projects in the region. For Armenia, the Republic of Azerbaijan shouldn't have 
implemented and strengthened such large-scale economic projects. 
The position of both Iran and Armenia was influenced by Russia's approach to such 
projects. For this reason, during the period from 1999 to 2003, various maneuvers 
were made to prevent such economic projects. 
On the other hand, the position of the European Union, which wants to reduce its 
energy dependence on Russia, coincided with that of Iran and Armenia. The 
European Union, which has political interests in resolving Armenia's energy 
problems, supported the project. In the context of this support, the European Union 
allocated €30 million in 2001 to develop technical and legal infrastructure projects 
related to the Iran-Armenia natural gas pipeline construction project
(Cabbarlı, 
2012, p.158). A treaty was signed between Iran and Armenia in January 2001. 
Following the EU's financial support for the project, Armenia and Iran intended to 
extend the natural gas pipeline through Georgia to the Black Sea coast, deliver the 
seabed to Ukraine and ensure the export of natural gas to Europe via Ukraine. In 
this case, the total length of the pipeline was estimated at 550 kilometers, and the 

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Kelbizadeh, E.
Güz/Fall 2022 
Cilt 12, 
Sayı 2, ss. 37-51 Volume 12, Issue 2, pp. 37-51 
41 
cost of the project was estimated at $5 billion. In the autumn, a treaty was signed 
between the two countries on gas supplies from Iran to Armenia (Jalili, 2002, p. 
54). 
Discussions on cooperation between Armenia and Iran in the field of hydrocarbon 
resources and energy security have intensified since 2003. On September 17, 2002, 
a groundbreaking ceremony was held at the Sangachal terminal in Azerbaijan, 
where the BTC began, with the participation of the leaders of the countries through 
which the pipeline passes. On September 10, 2003, construction of the BTC 
pipeline began. After that, Armenia and the Islamic Republic of Iran tried to 
strengthen cooperation in energy production and natural gas trade, sometimes even 
as an alternative to projects led by Azerbaijan, and to attract Georgia to the 
Yerevan-Tehran line. 
Iran-Armenia talks have intensified after Azerbaijan implemented projects to export 
hydrocarbon resources to Europe with the support of the United States. Armenian 
Energy Minister Armen Movsesyan, who visited the Islamic Republic of Iran in 
October 2003, also met with Minister of Petroleum of Iran Bijan Namdar Zanganeh 
to discuss the project to transport Iranian gas to Armenia (
Azerbaycan Dış İşleri 
Bakanlığı Arşivi, 2003/8, p. 37). At that time, a memorandum of understanding in 
the field of energy was adopted between the Ministry of Energy of the Republic of 
Armenia and the Ministry of Energy of the Islamic Republic of Iran (K
əlbizadə, 
Baxşıyeva, and Əzimov, 2019, p. 122). 
After lengthy discussions, work on the Iran-Armenia gas pipeline began in January 
2004. In the same year, the 5th meeting of the intergovernmental commission 
coordinating economic cooperation between Armenia and Iran was held. An 
agreement on the construction of the Iran-Armenia gas pipeline has been signed. 
Thus, Iran has taken the next step to support Armenia in overcoming its energy 
problems (K
əlbizadə, Baxşıyeva, and Əzimov, 2019, p. 123). 
In one of the WikiLeaks documents released in April 2004, a US source in Armenia 
wrote in a confidential letter that the project was unprofitable, noting that Armenia 
had virtually no financial resources to do so. The document read: "There is no