Meeting of Alkimia CEO with the Economic Attaché of Armenia in Iran on Export LPG Supply

Last week, at the request of the Economic Attaché of Armenia in Iran, a meeting was held with the Honorable Economic Attaché at the Embassy of Armenia in Tehran.
During this meeting, the Economic Attaché of Armenia raised several points, which are summarized below.

he emphasized the expectation for more competitive LPG pricing for Armenia, noting that currently Russia exports LPG to Armenia at lower prices. They also expected suitable storage and transportation facilities at the Iran-Armenia border to support these exports. The Attaché highlighted that one of the primary use of LPG in Armenia is for vehicles and stressed the importance of the appropriate propane-to-butane composition.

Regarding transportation, it was noted that if the export route is clarified, many transportation companies would be willing to serve this route at competitive rates. However, Armenia would need to rehabilitate its roads to standard conditions, which would affect both pricing and the willingness of LPG carriers to operate on this route.

The Attaché also mentioned that the quality of LPG from the National Iranian Oil Products Distribution Company is not consistent. This observation aligns with reality, as the company provides different propane-to-butane compositions each season. This could, however, serve as an option for Armenia, but they prefer receiving LPG with a specific, harmonized composition.

Our CEO, Mr. Seyed Morteza Shafaeian, noted that the National Iranian Oil Products Distribution Company’s LPG storage facility in Tabriz is located in close proximity to the Armenian border. He emphasized that the existence of this LPG terminal in this strategic border city has been an important step toward strengthening the long-term supply infrastructure for LPG exports to Armenia. He further stated that this facility provides a valuable logistical advantage and can contribute significantly to the development of a reliable and sustainable LPG supply chain between Iran and Armenia.

The CEO of Alkimia stated that very favorable discounts are currently offered for Armenia, which represents a significant step toward initiating this commercial relationship. Furthermore, the CEO noted that the minimum purchase quantity of Iranian LPG for Armenia has been reduced from 1,000 tons to 500 tons, allowing more traders to participate, which constitutes a new advantage.

Regarding pricing, the National Iranian Oil Products Distribution Company actively monitors the market, referencing reputable publications such as Platts and Argus, with prices set according to supply and demand. If entering the Armenian market is genuinely important for Iran and its oil companies, prices can be adjusted to a floor price. However, if discount requests are excessive, there is a risk of prioritizing only major export LPG markets, including Singapore, China, India, Bangladesh, and Pakistan.

The Attaché acknowledged that having access to different markets is an advantage, and Iran can include the Armenian LPG market among its sales markets.

Overall, Alkimia, as a policy-neutral entity in terms of pricing, receives a very fair commission and looks forward to cooperating in the LPG sector with all importers of this product in beautiful Armenia.