Kazakhstan may sell gas assets in Georgia

KazTransGas may become another of the Kazakh businesses to pull out of Georgia after the August conflict. Kazakh State Gas and Oil Company KazMunaiGas might look to sell its gas distribution company KazTransGas Tbilisi, the head of KazMunaiGaz, Kairgeldy Kabyldin told Reuters on Tuesday. Kabyldin cited financial problems as the reason this was being considered, saying that investment in the Tbilisi facility had not realised any profits as yet.

“It may be sold, just like any other business,” Kabyldin told journalists. However he said that the company is not planning to sell its oil terminal in Batumi, saying that it is a “strategic” asset.

Earlier in September Kazakhstan, one of the biggest investors in Georgia, announced that it was pulling out of a billion dollar oil refinery project in Batumi, but representatives then ruled out any possible link between their decision and the Georgian-Russian military conflict in August. However it also dropped plans to build a USD10 million grain terminal in Poti last month after the military action. The Kazakh Oil and Gas Company said that the “current situation in Georgia” was the reason it was withdrawing from the project.

Officials at KazTransGas Tbilisi say they have not received any notification from KazMunaiGas about any plan to sell the company. “KazTransGas Tbilisi continues working in its usual regime and carries on supplying the capital with natural gas. The company is not going to pull out of the market at this stage. If there are some business groups ready to pay a good amount of money for the company, KazMunaiGas will probably consider the deal, because this is a business,” the KazTransGas Press Centre said. KazMunaiGas bought bankrupt Georgian gas distribution company TbilGaz for USD 12.5 million in 2006 and has been planning to invest more than USD 82 million over four years to rehabilitate the old gas pipeline network in Tbilisi.