SOCAR remains key gas supplier for Georgia

 SOCAR remains key gas supplier for Georgia

The Azerbaijani state oil company SOCAR has signed an agreement with the Georgian government on additional supplies of Azerbaijani gas. The four documents were signed by the President of the State Oil Company of Azerbaijan, Rovnag Abdullayev, and the Deputy Prime Minister of Georgia, Kakha Kaladze.

The first document includes amendments to the gas contract. The second document regards changes in the gas purchase agreement. The document on the implementation of the commitments of the 'Warranty Commitment' was also signed. Two other documents affect the adoption of laws and purchase and sale of gas.

Earlier, Kaladze said that the agreement on additional supplies of Azerbaijani gas has almost been reached. "In fact, we reached the main agreement, and there will be an opportunity to receive additional volumes from the Shah Deniz pipeline," Interfax-Azerbaijan cited him as saying.

Rovnag Abdullayev said that previously up to 800 million cubic meters of gas were supplied from the Shah Deniz gas field to Georgia. According to the Director General of ‘SOCAR Energy Georgia’ Mahir Mammadov, additional supplies of natural gas will amount to 463 million cubic meters per year, Trend reports.

The head of the Center for Oil Research, Ilham Shaban, in an interview with a correspondent of Vestnik Kavkaza noted that although SOCAR and the Georgian Ministry of Energy discussed the increase in supplies by 460-500 million cubic meters of gas per year, in reality Georgia needs no more than 300-400 million cubic meters of additional supplies.

"These volumes will be provided through the BP infrastructure, that is, the South Caucasus Pipeline. An agreement, amending previous documents on the sale of gas, was also signed between SOCAR Georgia Gas Export Import and SOCAR. If before the price was fixed, now it will be determined by the new scheme, through its dependence on the price of oil. The price will vary after each quarter. Thus, we are witnessing the fact that Azerbaijan and Georgia refused the previous sales practice and moved on to a new relationship in determining the price of gas," he said.

Ilham Shaban stressed that SOCAR is the most advantageous supplier of gas for Georgia. "Under the new scheme the price of gas will proceed from existing conditions in the world markets, so it will be more beneficial for Georgia. Of course, the scheme means not only the reduction in prices after the reduction in oil prices, but also their growth after a rise in oil prices," the head of the Center for Oil Research noted.

Georgia's demand amounts to about 2.4 billion cubic meters per year.