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Energy Minister to announce completion of negotiations with Gazprom ‘in coming days’

By Tatia Megeneishvili
Thursday, March 10
Georgia plans to sign an agreement with the Gazprom energy giant in the coming days as verbal deals have already been reached, Georgia’s Energy Minister Kakhi Kaladze said on March 9 when he had to answer lawmakers’ questions concerning Georgia’s energy security.

“The point of our negotiations with Gazprom is that the conditions remain unchanged. This means Georgia will receive 10% free natural gas as a result of its transit from Russia to Armenia,” Kaladze said.

Gazprom wanted to monetize the transit fee and pay cash instead of giving Georgia 10% of its gas transported to Armenia. If monetized, the deal could be less beneficial for Georgia, as money received from Russia might not be enough for buying the same amount of gas Georgia received free of charge.

Kaladze also spoke about the importance of Georgia’s recent agreement with the Azerbaijani SOCAR company, which is Georgia’s major gas provider.

“Over the last few months, gas has been an important topic. Our ministry conducted negotiations on several fronts, so that the country could receive the necessary quantity of natural gas with the best conditions. We finally reached a very important agreement with Azerbaijan last week. The process was not easy, but it will be beneficial for the whole country,” stated Kaladze.

According to Kaladze, SOCAR will transfer gas to Georgia with the Shah Deniz pipeline. The deal envisaged gas provision till 2030.

“We are not dependent on only one supplier. Azerbaijan is our strategic partner. We receive 90% of our natural gas exactly from them. However, they simply could not transfer the needed quantity of gas as our demands and consumption has increased. Eventually, we agreed on additional gas supplies through the Shah Deniz pipeline,” Kaladze said.

The Minister underlined that in 2012 Georgia required 1, 969 million cubs, now the figure was over 2, 478 cubs.

The Minister also held a presentation of conducted works in Parliament on March 9. During his speech, Kaladze was wrangled by the opposition.

Members of the United National Movement (UNM) stated that the Ministry of Energy was lying when he stated that Azerbaijan could not transfer the necessary quantity of natural gas to Georgia.

“The Georgian government made a decision to sign a contact with SOCAR simply because the opposition and society pressured them,” stated a member of the UNM, Goka Gabashvili.

Georgia receives gas from two sources in Azerbaijan – one from SOCAR and another from the BP-operated South Caucasus Pipeline, which transports gas from Shah Deniz offshore field in the Caspian Sea to Turkey via Georgia. Gas supplies from these sources met 88.5% of Georgia’s total gas needs in 2015.

Georgia received 200 million cubic meters from Russia’s Gazprom as a fee for transiting Russian gas to Armenia, and also imported 75 million cubic meters of gas from Russia in 2015.

Initially, Kaladze also stated that as Azerbaijan could not provide additional gas, Georgia might have bought additional gas from Gazprom, which sparked protests by the opposition and the civil sector.