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Energy Minister discusses necessity of additional gas from Russian Gazprom

By Gvantsa Gabekhadze
Thursday, January 14
Georgia’s Minister of Energy, Kakhi Kaladze, stated on January 13 that it is currently impossible for Georgia to receive additional gas supplies from Azerbaijan and the deficit will be filled by the Russian gas.

However, the Minister stated that after completion of several projects - presumably scheduled for completion in 2019 - Georgia would be able to get more gas from Azerbaijan’s SOCAR Company.

The statement came after the January 13 meeting between Georgia’s Prime Minister, Giorgi Kvirikashvili, Kaladze and SOCAR’s regional leadership in Tbilisi.

“Currently, it is technically impossible for Georgia to receive additional gas supplies from Azerbaijan when we have such a high demand. This is especially true in the winter months, as gas consumption increases in winters.

“Both of the SOCAR pipelines we are receiving gas from are working at their maximum capacity. We are speaking about and planning such projects that will provide an opportunity for more gas transit in the future,” Kaladze said.

The Minister highlighted that allegedly, the deficit Georgia is facing during the winter period will be filled by Russian gas, provided by Gazprom.

Mahir Mammadov, the head of SOCAR Energy Georgia, stated after the meeting that Azerbaijani experts would work on how Georgia could be provided with additional gas in its time of need.

SOCAR exported 1.25 billion cubic meters of gas to Georgia in January-November 2015.

SOCAR delivers its own gas to Georgia via a pipeline that runs through Azerbaijan’s Gazakh district. The gas pumping capacity via this pipeline nears three billion cubic meters per year.

Azerbaijan is the main gas supplier to Georgia with a share of 77.9 percent of the total volume of gas imports of the country, Azerbaijani’s has reported.

About 686 million cubic meters of Azerbaijani gas came as part of the agreement in the frames of the BP-operated South Caucasus Pipeline, which transports gas from the Shah Deniz offshore field in the Caspian Sea to Turkey via Georgia. A total of 1.21 billion cubic meters were imported as part of a separate deal with Azerbaijan.

Georgia received 267.7 million cubic meters of gas from Russia in 2014, of which 206.1 million was dubbed a transit fee. As a fee, Georgia gets 10% of Russia’s gas transited to Armenia through the North-South Pipeline. Georgia also imported 61.6 million cubic meters of Russian gas in 2014.

In his previous statements, Kaladze stated that due to Georgia’s increasing gas consumption, the country may need to import additional gas from Russia.

Kaladze’s plans are being opposed by the opposition and a major part of the civil sector.

The United National Movement opposition party says that the government is in “confidential talks with Russia” and their steps might result in Georgia becoming dependent on Russian gas, as Russia has previously used its state-owned companies as political levers against rivals.

Meanwhile, the parliamentary majority and a number of government representatives state that Georgia has received additional volumes of gas from Russia since 2003, when the UNM was in power.

“Moreover, the previous state leadership used to sell strategic objects to the Russians, so they have no right to speak about such topics,” majority MP Manana Kobakhidze said, though did not provide any examples of ‘strategic objects’ sold to Russia.

Kaladze does not deny negotiations with Gazprom. He says that agreements are annually renewed, adding that Russia might pay money instead of providing free gas to Georgia.

The analysts say that without professional involvement, such an exchange might cause serious losses for Georgia.