YEREVAN, Armenia, July 16 (UPI) -- The Armenian and Iranian governments agreed to split the cost evenly for the construction of a 217-mile oil pipeline, the Armenian oil minister said.
Iran sits on some of the largest oil and gas deposits in the world. Armenia would receive 70,000 barrels of oil through the proposed Shahnazi-Zadeh pipeline.
Armen Movsisyan, the Armenian minister of oil and natural resources, said his country agreed to split the cost of the pipeline with Iran, Iran's state-funded broadcaster Press TV reports.
The minister estimated that it would cost as much as $180 million to build the 217-mile pipeline.
The development follows passage in Washington of unilateral sanctions that target the Iranian energy sector.
The report from Press TV said construction on the oil pipeline was expected later in 2010.
NATO in 2008 warned Armenia that it needed to take steps to increase transparency in the energy sector to counter high energy costs.
Iran and Armenia announced plans last year to build a 70-mile natural gas pipeline as well.