Gazprom Oil confirmed considering oil processing factory in Armenia

Mediamax, Armenia
Jan 26 2007

`Gazprom Oil’ confirmed that it is considering the possibility of
constructing an oil processing factory in Armenia

Yerevan, January 26 /Mediamax/. The `Gazprom Oil’ Company confirmed
that it is considering the possibility of constructing an
oil-processing factory (OPF) in Armenia.

As the Russian `Kommersant’ newspaper writes today, here they mean a
factory on the border with Iran, which would have the might to
process up to 7mln tons of oil per year.

The construction cost of the OPF is estimated to make minimum $1,7bln
without taking into consideration the transport infrastructure, which
will make about $1mln.

According to the data of the newspaper, the Armenian side primarily
proposed Russia to build a factory with the might to process 3-4mln
tons.

`However, Moscow made a counteroffer, increasing the might of OPF
almost twice. The oil demand of Armenia itself does not exceed 250
thousand tons per year. Why it is needed is easy to understand from
the location of the future factory – it was proposed to be built on
the Armenian-Iranian border, in the region of Meghri. The oil will be
arriving to the factory from Iran, for which it will be necessary to
build a 200 km pipeline from the Iranian Tebriz, where there is
already an OPF, up to the border with Armenia. The transportation of
the oil back to Iran is proposed to realize by railroad, which also
does not exist’, the newspaper writes.

`Experts consider the given project meaningless from the economic
point of view, explaining the interest for the project by political
motives. Indeed, an OPF in Armenia is a political project, the
potential participants of which count on receiving first of all
political dividends’, `Kommersant’ writes.

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