Construction of a gas depository gets closer

One result of President Saakashvili’s visit to Baku on May 20-21 was that the Azeri side has promised to become actively involved in the building of a gas depository in Georgia.

“We reached an agreement on this issue. This project is the guarantee of a stable gas supply for Georgia. We have been discussing this for a long time with our American and European partners, however it has been decided that we will construct this together, without the help of foreigners,” Saakashvili said at the meeting with Azeri Prime Minister Artur Rasizade.

The talks about constructing the depository have been going on for a long time. It is obvious that this will have great importance for the energy security of the country. The biggest problem was funding, however funds have been found. The Government issued Eurobonds worth USD 500 million in 2008, aiming to raise the funds for constructing the depository, but most of that money has been spent. However USD 117 million of the USD 4.5 billion allocated by donor countries after the August war was meant for the construction of an underground gas depository. The Millennium Challenge Fund also expressed a willingness to co-fund the project, but it has been decided to involve Azerbaijan very actively instead.

Georgian Energy Minister Alexander Khetaguri states that Azeri State Oil Company SOCAR will participate in the tender announced for preparing the construction project. The construction will be divided into three stages: the initial volume of the depository will be 400 million cubic metres, 20% of Georgia’s annual consumption, but in the second and third phases of construction the project will take on regional importance. If Azerbaijan expresses a willingness to keep its gas in the depository, in order to later transit it to Europe, its volume will reach 5 billion cubic metres.

There are about 15 natural reservoirs where the construction of a gas depository is possible, however it is most likely that Ninotsminda will be chosen. The project works will be completed in 9 months. The first stage of construction will take two years. According to experts, the construction will cost about USD 200 million.