Georgia paid enough by Gazprom to transit Russian gas to Armenia – deputy minister

Interfax - Russia & CIS Energy Newswire
 Thursday 6:56 PM MSK


Georgia paid enough by Gazprom to transit Russian gas to Armenia -
deputy minister

TBILISI. Jan 25

Georgian Deputy Minister of Economy and Sustainable Development Giorgi
Chikovani has dismissed the opposition claims that the republic is not
importing Russian natural gas in 2018 because it has no money left to
buy it after signing a new agreement with Gazprom (MOEX: GAZP) to
transit gas to Armenia.

"This year Russian natural gas is not imported because at this stage
Georgia fully satisfies its demand for gas with its supplies from
Azerbaijan," Chikovani told journalists on Thursday, commenting on the
opposition claim that the money paid by Gazprom for the transit was
only enough to transport gas to Armenia.

Paying cash for transit is a worldwide practice, he said.

"To say that this money is not enough for us is incorrect. This is a
confidential agreement [with Gazprom Export] that we have no right to
disclose, although Georgia does get paid enough for the service
provided," Chikovani said.

Georgia is quite satisfied with gas supplies from Azerbaijan, which
come in two ways: as part of the Shah Deniz project and under
contracts with Azerbaijan's state oil company SOCAR, the deputy
minister said.

"Although the agreement with Gazprom Export stipulates that should
Georgia need more gas during peak consumption or emergencies, we can
import it, gas, from Russia," Chikovani said.

Earlier the parliamentary faction of the opposition National Movement
party (set up by ex-president Mikheil Saakashvili's supporters) had
insisted on considering a draft resolution on the issue of the
government's contract with Gazprom Export and whether a temporary
inquiry commission should be set up to examine the issue. The issues
were never considered.

Meanwhile, the parliamentary majority think that every time the
opposition faction made such a proposal, it was trying to reignite
scandal. Georgian Dream deputies called the opposition actions "pure
speculation and populism," sharing the executive authority's view that
at talks with the Russian company everything was done for Georgia to
secure the best possible terms.

For the first time in many years, in 2018 Georgia's natural gas trade
balance does not envisage Russian natural gas import, which in 2017
was set at 185 million cubic meters, down 28.1% on the previous year.

Under the agreement, which Georgia and Gazprom Export signed in early
2017, last year gas transit to Armenia was paid for under a mixed
scheme: part money, part raw material; and in 2018 money only. Gazprom
Export guaranteed payment for gas transit via Georgia to Armenia of
2-2.2 billion cubic meters per year in 2017-2018, and for supplying
gas to Georgia "on flexible terms, at $30 per 1,000 cubic meters less
than in 2016," i.e. for $185.

Previously Georgia would get 10% from the total Russian gas it
transited to Armenia.