Liana Dzhervalidze: "Georgia is looking forward for launch of the Southern Gas Corridor’’

Liana Dzhervalidze: "Georgia is looking forward for launch of the Southern Gas Corridor’’

Vestnik Kavkaza spoke with an analyst of the Georgian Oil and Gas Corporation, one of the leading Georgian energy experts, Liana Dzhervalidze, about the importance of the upcoming launch of the Southern Gas Corridor for Georgia and the changes that followed the transition to a cash payment for a transit of Russian gas.

- What benefits will Georgia get from the commissioning of the Souther Gas Corirdor’s pipeline system?

- Under the Consortium One contract, we receive 5% of the gas that is transported from Azerbaijan via our gas pipeline system, which means that we will receive 800  million cubic meters of 16 billion cubic meters of gas, that will be supplied to Europe and Turkey via the Southern Gas Corridor annually. This will significantly balance the Georgian gas market within the country. The matter is that for the moment, we have a shortage of fuel in winter, and thanks to Azerbaijani gas we will be able to fill the gap. Of course, everything will depend on when exactly the Southern Gas Corridor will be put into operation. In the future, when the project is expanded to 30 billion cubic meters of gas annually, we will receive 1.5 billion cubic meters for the transit.

- What are the expectations of the Georgian leadership due to the launch of the Southern Gas Corridor?

- Georgia is looking forward for the Southern Gas Corridor to start working, and advocates for the growing of the gas production in Azerbaijan. It also wants the other gas suppliers, for example, Turkmenistan, to be connected. This will increase our importance. As you know, Turkmenistan sells its gas at the border, and if we buy 5-10 billion cubic meters of Turkmen gas annually, will be able to fill our share at the European market with this volume.

- Why did Georgia switch to payment for the transit of Russian gas?

- We were forced to do so. As Georgia became an associate member of the European Union, we signed, among other things, the European Energy Charter, according to which we can not demand for transit 10% of the gas supplied to Armenia by Gazprom. In accordance with this document, we can only receive money for transit and use this money to buy as much gas as possible. It is clear that now our opportunities depend on the gas prices: today it is cheap and we can get more gas, but if in the future 1000 cubic meters will cost $ 300-400, and we will not be able to buy anything for the Russian transit money. Naturally, it was initially unprofitable for us, we resisted, but all in all, we could not ignore our international obligations.

- How does this relate to the fact that Georgia refused to purchase Russian gas before the end of the year?

- We used those 100 million cubic meters that we received as a 10 percent payment for the first billion of the Russian transit, and for the second billion transit we will receive money from Gazprom. At the moment, it is not profitable for us to buy gas in Russia, so we are counting on the additional supplies from Azerbaijan. If SOCAR can replenish those 100 million cubic meters that we should have received from the second half of the Russian transit, when we need it, we will be very pleased. But if it can not, then before the first deliveries through the Southern Gas Corridor, which will begin in a year or two, we are better off buying less gas as a whole, since it is even less profitable for us to spoil the relations with Azerbaijan.


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