GGP: Georgia’s Gas Market: Short and Medium Term Challenges
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The following is an excerpt from a policy brief originally published by the Partnership for Social Initiatives.
The new transit agreement with Gasprom-Export revealed the vulnerability of Georgia’s gas market in the short and medium term and highlighted the need for reevaluating gas supply security conditions throughout 2018- 2022 -2025 years when step by step all current transit contracts come to an end.
Thus, Georgia shall have to renegotiate and conclude new transit and supply contracts in substitution of those expiring in 2018 (Russian gas transit to Armenia) and 2022-2025 years (optional and supplemental gas with SD and SCP consortiums) in order to insure long term security of gas supply and procure fair and affordable tariffs for its consumers.
Overview
Georgia is located on the south slope of the Caucasus mountains, on the eastern shore of the Black Sea. Due to its location Georgia is rich in hydro resources, while no significant oil or gas reserves have been discovered yet. In these circumstances Georgia heavily depends on imports in terms of natural gas and oil products.
In addition Georgia together with Turkey is a transit country for Azerbaijani oil and gas to western markets through BTC (Baku-Tbilisi Ceihan Oil Pipeline) and SCP (South Caucasus Gas Pipeline) pipelines. Kazakhstan considers South Caucasus energy corridor as a potential transportation route for its oil and Turkmenistan –for its abundant natural gas resources if Trans Caspian gas pipeline built as EU commission envisages. After lifting sanctions on Iran, the route through this country could also be used for delivering Turkmen gas via Southern Gas Corridor to the EU. Thus, Georgia’s geographical location positions the country as an expanding transit corridor for oil, natural gas and electric power that is expected to enhance economic growth and to facilitate potential private investment inflows in the country. This research paper attempts to analyze the dynamics
Liana Jervalidze, Analyst on Energy Security and Transit at the Orbeliani Center for Advanced Energy and Security Studies
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.