* Russian base on Armenia’s western border with Turkey
* Russia balancing between foes Armenia and Azerbaijan
By Denis Dyomkin
YEREVAN, Aug 20 (Reuters) - Russia extended its lease on Friday on a military base in the former Soviet republic of Armenia until 2044, strengthening its presence in the South Caucasus energy transit region.
The deal, signed in Yerevan during a visit by President Dmitry Medvedev, extends a 1995 lease on the Gyumri base on Armenia’s closed western border with NATO-member Turkey, home to several thousand Russian soldiers who patrol the frontier.
Armenian officials have praised the deal as a guarantee of Russian backing in the event of new conflict with neighbouring Azerbaijan over the rebel mountain region of Nagorno-Karabakh.
The extension is in line with Russian policy of maintaining its influence in the South Caucasus, a volatile region criss-crossed by pipelines skirting Armenia and carrying Central Asian and Caspian oil and gas to Europe.
The original lease ran for 25 years.
Russia also has troops in two breakaway regions of neighbouring Georgia, where it is building up bases in the wake of a five-day war over rebel South Ossetia in 2008.
Ethnic Armenians in Nagorno-Karabakh, backed by Armenia, threw off Azeri rule with the collapse of the Soviet Union in a war that killed an estimated 30,000 people. A ceasefire was agreed in 1994 but a peace deal has never been reached.
Asked about the possibility of Azerbaijan carrying out a frequently voiced threat to take back the enclave, Medvedev said Russia was continuing in its role as mediator.
But in a reference to the Georgia war, in which Moscow says it was forced to respond to Georgian aggression, he added, “We went through some difficult events in 2008 and we would not like such events to be repeated.”
“It is the task of Russia as the largest state in the region ... the most powerful state, to secure peace and order.”
Russia, he said, has “allied obligations” towards Armenia as fellow members of the Collective Security Treaty Organisation (CSTO), a Russian-led security alliance of ex-Soviet republics that does not include Azerbaijan.
Russia has been careful to seek a balance between the foes in recent years, closely courting Azerbaijan for its energy reserves in the Caspian Sea.
Unconfirmed Russian media reports this month suggested Moscow had sold sophisticated S-300 anti-aircraft missile systems to Azerbaijan, unnerving Armenia.
Military analysts say such a purchase was more likely linked to Azeri unease over retaliation from neighbouring Iran in the event of an Israeli or U.S. strike on its nuclear facilities.
Russia and Armenia also signed an agreement on Friday on Russian participation in construction of a nuclear reactor at an estimated cost of up to $5 billion.
The reactor is to be built at Armenia’s existing Russian-operated, Soviet-era nuclear plant, which provides around 40 percent of the country’s electricity.
Some in the Armenian opposition have objected to what they say is Moscow’s growing hold over the landlocked country of 3.2 million people, which is heavily dependent on investment and remittances coming from Russia. (Additional reporting by Steve Gutterman in Moscow; Writing by Matt Robinson in Tbilisi; Editing by Maria Golovnina)