Georgia to buy Russian gas for first weeks of 2007 – premier

ITAR-TASS, Russia
Dec 22 2006

TBILISI, December 22 (Itar-Tass) — Georgia will have to buy Russian
gas at $235 per 1,000 cubic meters in the first weeks of 2007 because
of technical problems at Azerbaijan’s Shah Deniz field, Prime
Minister Zurab Nogaideli said on Friday.

"Technical problems of a well delayed by several weeks the deliveries
through the Baku-Tbilisi-Erzurum pipeline, which were planned for
December 22," he said.

"However, Azerbaijani gas is Georgia’s strategic choice," Nogaideli
said. "As soon as the technical problems are resolved, we will start
receiving gas mostly from Azerbaijan."

"Russian gas purchases at a price suggested by Gazprom is a reluctant
but temporary measure," he added.

Gazprom has signed three contracts on the delivery of 1.1 billion
cubic meters of gas to Georgia in 2007 at a price of $235 per 1,000
cubic meters, company deputy CEO Alexander Medvedev said.

He said gas payments will be monetary as Georgia is not prepared to
pay with assets so far.

The contracts were signed with three leading gas consumers in
Georgia: the Klari Energy Corporation that generates electricity, the
Kastrasgaz Tbilisi Company that supplies gas to the capital city, and
the Georgian International Energy Corporation that makes cement.

No gas contracts have been signed with Georgian chemical plants, and
there are no agreements to transit gas to Armenia either. This is our
concern, Medvedev said.