Georgia to invest in gas storage tanks
By M. Alkhazashvili
The Messenger, Georgia
July 20 2005
A natural gas storage facility: Rehden, pictured here, is the largest
storage facility in Western Europe
The U.S. Trade and Development Agency (USTDA) is allotting USD 1
million for research into the possibilities of constructing a natural
gas storage facility in Georgia – storage tanks widely viewed as
vital for energy security.
Gas storage facilities exist in all developed countries. There are
reportedly 634 in the world, including three underground facilities
in the South Caucasus – two in Azerbaijan and one in Armenia.
Energy experts consider the construction of a gas storage facility
in Georgia a matter of urgency on the grounds that the tanks would
make Georgia’s energy supply more stable as it would be possible to
continue to supply the country with energy for several months in the
event of some interruption in imports.
Furthermore, it is argued that a storage facility would reduce gas
prices as the tanks would allow the country to import gas in the
summer when prices are lower and save it until winter.
Ongoing construction of the South Caucasus pipeline which will carry
gas from the Shah-Deniz gas fields in Azerbaijan to the Mediterranean
mean that it would be even more prosperous for Georgia to build a
storage facility, as the country will receive 5 percent of transported
gas and will be able to buy additional gas at special prices for
twenty years.
Some work has been done in preparation for construction of a storage
facility, with two abandoned oil mines in Rustavi and Ninotsminda
seen as the best locations for such a facility. The new research is
aimed at identifying which location would be better.
Saknavtobi Head Mikheil Sidamonidze says it is possible to store
at least 300 million cubic meters in the Rustavi mine and at least
750 million cubic meters in Ninotsminda. Georgia currently uses
approximately 900 million cubic meters of natural gas annually.
In addition to having the greater capacity of the two, a facility at
Ninotsminda would likely only take two years to construct, while a
storage facility at Rustavi would take five years to construct. While
the Rustavi tank would cost an estimated USD 45 million, estimates
for a facility at Ninotsminda range from USD 25 million up to USD
90 million.