Iran and Armenia have signed a memorandum of understanding to boost cooperation on oil, gas and electricity and expand their commercial and industrial ties, Iranian media reported Tuesday.
Armenian Energy Minister Armen Movsisian on Monday signed the agreement with Iranian Foreign Minister Ali Akbar Salehi in Tehran.
"The volume of trade between the two countries has increased by 38 percent in 2010, rising to 270 million dollars," said Salehi, adding Iranian President Mahmoud Ahmadinejad would visit Armenia "next week."
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The two countries have decided to build a power line with a capacity of 500-800 megawatts linking their electricity grids, local papers reported.
Tehran and Yerevan are also mulling over plans for Iranian companies to construct two 180-megawatt hydroelectric dams on Aras river, which borders the two countries.
In February, Movsisian announced plans to construct a 365-kilometre (227-mile) pipeline from the northwestern Iranian city of Tabriz to Eraskh in Armenia.
The pipeline would provide Armenia with an alternative to Russian energy imports, which were disrupted by the Georgia-Russia war in 2008.
In 2007, the two countries inaugurated a gas pipeline designed to transport 36 million cubic metres of Iranian gas to Armenia per day for 20 years.