Civil Georgia, Georgia
Feb 22 2005

State Minister: No Threat in Privatizing Gas Pipelines

State Minister for Economic Reform Issues Kakha Bendukidze said on
February 22 that privatization of the gas pipeline system poses no
threat to Georgia’s energy security. He said that along with Russian
energy giant Gazprom, which is eyeing Georgia’s gas pipeline system,
the consortium that is heading-up the construction of the U.S.-backed
Baku-Tbilisi-Erzerum gas pipeline can also participate in the
privatization process.

`I can not understand why it should pose a threat if those gas
pipelines, through which Georgia receives gas from Russia, will be
sold to Russia and if they will take care of [the gas pipeline
system],’ Kakha Bendukidze told reporters.

In an interview to the Italian newspaper La Stampa published on
February 20, Georgian President Mikheil Saakashvili said that talks
are underway with the Russian energy giant Gazprom over privatization
of Georgia’s gas pipeline system. `Negotiations are in progress… I
prefer not to say more,’ Saakashvili answered when asked whether
Georgia intends to sell its gas pipelines to Russia.

In 2003, when the Georgian government and Gazprom signed a memorandum
on strategic cooperation for 25 years, ex-Georgian President
Shevardnadze’s administration came under fierce criticism from the
opposition for signing this deal, as the agreement was considered a
threat to the implementation of the U.S.-backed Baku-Tbilisi-Eresrum
gas pipeline project.

`I think the fact that Baku-Tbilisi-Erzerum gas pipeline is so
sensitive to this issues means that the Georgian gas pipeline system
might have two potential buyers, which is, of course, a positive
moment,’ State Minister Kakha Bendukidze said on February 22.

The Baku-Tbilisi-Erzerum gas pipeline is a part of much broader,
BP-led oil and gas development project in the region, which also
includes the Baku-Tbilisi-Ceyhan (BTC) Main Export Oil Pipeline
Project.

The agreement between the state-owned Gazprom and Georgia signed in
2003, which is still enforced, envisages the supply of natural gas to
Georgian customers and the rehabilitation of gas pipelines, including
two trunk-line gas pipelines, one of which will be used for
transporting gas to Armenia and the other to Turkey, via the Adjara
Autonomous Republic.

From: Emil Lazarian | Ararat NewsPress