Georgia To Buy from Gazprom "Only If Necessary": New Minister
Georgia will buy gas from Gazprom only if necessary and does not have any obligations to purchase specific volumes of Russian gas, Ilya Eloshvili, the new energy minister, told journalists in Tbilisi July 13.
“Why did we sign a contract with Gazprom? Because we need additional volumes of natural gas in certain periods,” he said, explaining the reasons for the renewed agreement with Gazprom on the transit of Russian gas to Armenia.
He noted it is not worth talking about how profitable or loss-making for Georgia the new agreement with Gazprom is. “The main thing is that we have no obligation to buy a certain volume of gas, we buy gas from Gazprom when there is not enough in the country,” the minister said.
According to the contract signed this January, Gazprom in 2017 pays for transit of gas through a mixed system - partly with cash, partly with gas -- but in 2018 it will pay solely with cash. The volume of transit of Russian gas to Armenia through Georgia will be 2-2.2bn m3/yr in 2017 and 2018. Gazprom has also pledged to supply gas to Georgia at $185/'000 m3 ($5.14/mn Btu), representing a discount of $30/'000 m3 ($0.83/mn Btu) relative to 2016.
Georgia, according to its energy balance, plans to import 2.457bn m3 in 2017, including 2.347bn m3 from Azerbaijan (95.5%) and 0.11bn m3 from Russia. In 1Q2017, Georgia already purchased 0.1bn m3 from Gazprom (of which 30mn m3 in January and 70mn m3 in February).
Eloshvili replaced former soccer player Kakha Kaladze as energy minister on July 12.
European Commission vice-president for Energy Union, Maros Sefcovic, meanwhile has said: “Georgia has a key transit role to play in the opening of the Southern Gas Corridor." He made the remark ahead of his official visit to Georgia to attend an international conference in Batumi.
Gas initially produced as part of the phase 2 of development of Azerbaijan's Shah Deniz field will be the main source for the Southern Gas Corridor project, with other sources potentially available at a later stage. Under SD phase 2, gas from the field will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and by building the Trans Anatolian Natural Gas Pipeline (across Turkey) and Trans Adriatic Pipeline (across southeast Europe). First SD gas is due to reach Italy in 2020.
Azerbaijan Desk