TBILISI: In order to attain energy independence

24 Saati, Georgia
Sept 9 2008

In order to attain energy independence

by Tamar Khorbaladze

Russia using energy resources for political pressure

The international community presently expects Russia to honour the
six-point agreement. According to the most optimistic predictions, the
Russian troops will pull out of the parts of Georgia outside the
separatist provinces. However, along with the military force, Russia
can also use its energy resources for pressure. It has blatantly tried
to exert this kind of pressure not only on Georgia but also on the EU
countries.

[Passage omitted: Temporary suspension of Russian gas supplies to
Poland and Germany coincides with the meeting of the European Council
in Brussels]

For this reason, the search for alternative sources of energy supplies
was one of the central topics of the EU summit. Analysts believe that
the same question was the main factor behind US Condoleezza Rice’s
trip to North Africa. They have suggested that the first visit by a
high-ranking US official to Libya in 55 years was aimed at preventing
Russia and its Gazprom form establishing a monopoly over the country’s
gas reserves. Energy resources were also among the main subjects
discussed during US Vice President Dick Cheney’s visits to Azerbaijan,
Georgia, Ukraine and Italy. However, while the West is looking for
ways of reducing its dependence on the Russian energy supplies, Moscow
continues to use energy resources as a lever for political pressure.

Georgia relying on electricity produced domestically

There are only a few months left before the winter comes. Is Georgia
ready to survive the likely energy pressure? The government is
optimistic. "There are no problems whatsoever in Georgia in terms of
electricity and natural gas", Georgian Energy Minister Aleksandre
Khetaguri has said. He noted that the scheduled repair work is being
conducted now in order to avoid any problems in the winter. Khetaguri
also said that Georgia receives natural gas from different sources and
there will be no problems in that respect in the winter.

Has Georgia really been able to do what Europe is yet to achieve,
i.e. reduce the energy-related threats through the diversification of
energy imports?

Officials from the energy system often emphasize that the country has
effectively stopped importing electricity over the last two years. In
the winter, the country’s power supply consists of the electricity
generated domestically (at the Inguri and other hydroelectric power
stations and the Gardabani power station) as well as the electricity
received from abroad in return for the electricity exported in the
summer. The Inguri power station is still controlled by the Russian
military though representatives of the Georgian energy system have
said that the plant is working in the normal mode and it is impossible
to restrict the supply of electricity to Georgia for purely technical
reasons. The Russian-owned Telasi company is responsible for power
supply in Tbilisi. The Russians also own the 9th and the 10th blocks
of the Gardabani power station that are an important element of the
country’s power supply in the winter. The Georgian government has said
that it is not going to create any problems for the Russian companies
that operate in the country (naturally, no one can say anything in
public as to whether there could be acts of sabotage or whether those
blocks can break down at a critical time the way it used to happen
before the Rose Revolution).

Telasi itself has told 24 Saati that the company continues to operate
as usual. Valeri Pantsulaia, head of the Telasi public relations
service, said that contracts have been signed with the suppliers and
repair work has been completed in Tbilisi’s internal network. There
are some reserves too and Telasi can cope with a 10-15-per cent
increase in power consumption.

Georgia importing natural gas from different sources

As for Georgia’s gas supply, the country does indeed import gas from
different sources today. Specifically, the State Oil Company of
Azerbaijan Republic [SOCAR] resumed supplying the Georgian Gas and Oil
Corporation with gas on the basis of a new contract on 10 May
2008. Under this contract, Georgia is to receive 1.5m cu.m. of gas a
day in 2008. The country received a daily amount of 1.3m cu.m. from
the same source in 2007. Neither party has disclosed the price of
gas. Moreover, the state corporation receives natural gas as part of
the Sah Daniz project, as well as 10 per cent of the gas supplied to
Armenia by Gazprom. According to the official information, the
Georgian state corporation does not buy natural gas from Gazprom
today. However, there are private companies that have direct contracts
with Gazprom. As 24 Saati was told, Tbilkaztransgaz which is
responsible for the capital’s gas supply is one of these companies.
Interestingly, 12 of Georgia’s provinces receive gas from Russia’s
Itera, while the rest of the country receives it from Azerbaijan’s
SOCAR. Despite the diversification of import, analysts have said that,
without Gazprom’s natural gas, it will be impossible to supply the
entire country in the winter. They have also said that an increase in
the price of natural gas is inevitable regardless of whether the
negotiations are conducted by the state or the private companies.

There is another threat: Gazprom has offered to buy all of the gas
extracted in Azerbaijan. Although Azerbaijan’s Trend news agency has
reported that the offer was followed by a similar proposal from
Turkey, the fact is that the question is still being discussed. The
events that have unfolded in recent days indicate that Russia is
planning to use the question of Nagornyy Karabakh to exert pressure on
Azerbaijan.

[translated from Georgian]