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Western Investor To Look For Shale Gas In Armenia

Armenian Prime Minister Tigran Sarkisian

Armenian Prime Minister Tigran Sarkisian

YEREVAN -- A Western company has pledged to explore Armenia's untapped deposits of shale gas and to possibly attract foreign investment for commercial exploitation, RFE/RL's Armenian Service reports.

An executive of the offshore-registered International Minerals and Mines (IMM) signed a memorandum of understanding with Energy and Natural Resources Minister Armen Movsisian in Yerevan on August 3 detailing an agreement to explore shale-gas opportunities in Armenia.

The development came two months after a similar agreement signed by the Armenian and U.S. governments. It calls for a "cooperative assessment and technical studies" of Armenia's shale-gas resources to be conducted by the Energy and Natural Resources Ministry and the U.S. Geological Survey, a state agency.

In a written statement, the Armenian government said IMM plans to "fully explore and develop shale-fuel reserves existing in our country." It said the company will do that through a recently established subsidiary called IMM Energy Armenia.

The statement did not specify any time frames or other details of the exploratory work.

Prime Minister Tigran Sarkisian, who was present at the signing ceremony, was cited as stressing the importance of the deal.

According to corporate records on the Internet, both IMM and IMM Energy Armenia were registered in the Isle of Man, a British-run tax haven, as recently as June 16.

The U.S.-Armenian memorandum on shale exploration was also signed in June.

The Energy and Natural Resources Ministry said at the time that the two sides will not only gauge the feasibility of shale mining in Armenia but possibly devise "investment projects" for that purpose.

The ministry added that the agreement is the result of an international conference on shale gas that was hosted by the U.S. State Department in August 2010. It said U.S. officials offered exploration grants to government representatives from Armenia and about two dozen other countries that attended the three-day forum.

"The organizers...noted the readiness of the U.S. government and companies to make investments in those countries," a ministry statement issued on June 2 said.

Shale gas has become an increasingly important source of natural gas in the United States over the past decade. Shale-gas industries have also emerged in Europe and China.

The world's vast reserves of the sedimentary rock needed for shale gas have led some to suggest that shale gas will become a legitimate alternative to depleting energy resources such as conventional gas and oil.