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Iran's Armenian Connection

1:13 PM, Apr 16, 2012 • By EMANUELE OTTOLENGHI
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The Iranian company involved in the deal is the National Iran Oil Refineries and Development Company. It is a subsidiary Iran’s National Oil Company, which has a history of contracting projects out to the Iranian Revolutionary Guards Corps. For example, the IRGC’s construction branch, Khatam al-Anbiya (KAA), is involved in the 850-kilometer pipeline project linking the Persian Gulf to the Caspian Sea.

There are other reasons for concern. As Hayk Gevorgyan wrote last year in the Armenian Times, “The future Iran-Armenia oil pipeline will serve the interests of Armenia's shadow economy, as according to Iranian reports, 440,000 tons of oil will be pumped from Iran to Armenia annually, whereas Armenia's annual demand for oil and diesel fuel is 250,000 tons only.” As Gevorgyan concludes, “the amount of oil products to be imported via the pipeline exceeds the amount officially consumed in Armenia.” So what happens to the surplus? Presumably, it will be siphoned off for smuggling, a significant source of profit for the IRGC.

The already existing gas pipeline linking Iran to Armenia lacked funding for the Armenian side, until the Iranians kicked in some cash. According to a 2004 leaked cable from the U.S. embassy in Yerevan, “The Iranian Bank for Export and Development has agreed to finance a $30 million segment of the pipeline from the border of Iran to Kajaran, Armenia, 41 kilometers north.  The Armenian Ministry of Energy will pay back the loan over 7 years at 5 percent annual interest.”

The Iranian Bank for Export and Development, an IRGC affiliate sanctioned by the U.S. Russia’s Gazprom, invested an additional $200 million to help complete the project, but the Iranian-funded part was contracted to a consortium of Iranian companies known as SUNIR, whose stockholders include at least three Iranian entities that were either blacklisted or sanctioned for proliferation concerns: Mahab Ghodss Consulting Engineering Co, Mehrabad Industrial Co, and Fulmen Co.

This is neither an exception nor a coincidence. Many of the current Iranian projects in Armenia have been promoted under deals signed by the two countries’ ministers of energy. Iran’s, Majid Namjoo, is an IRGC veteran and awards contracts to IRGC-linked companies For instance, the lead company on the Meghri Dam project on the Aras River, demarcating the border between the two countries, is Farab Co., chaired by Rasoul Zargarpour. He is an IRGC veteran who was former deputy minister of the ministry of construction jihad, the IRGC-affiliated institution in charge of engineering projects.

Armenia may continue to plead innocence for its budding relation with Iran. But if the White House hopes that sanctions will halt Iran’s march to a nuclear bomb, U.S. policymakers should not be as lenient with Yerevan as they have been in the past.

Emanuele Ottolenghi is a senior fellow at the Foundation for Defense of Democracies and author of The Pasdaran: Inside Iran’s Islamic Revolutionary Guards

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