Gasopolitics: Georgia's Move Toward Deal with Gazprom Raises Eyebrows in Baku, Protests in Tbilisi

A revelation on October 10th by the Georgian Deputy Prime Minister and Energy Minister Kakha Kaladze for plans to diversify the nation's gas supply by increasing shipments from Russia’s Gazprom, has raised voices against the proposal in Tbilisi and Baku.

The announcement followed Kaladze's meeting in late September with Alexey Miller, Chairman of the Gazprom Management Committee.

“The parties addressed the issues of cooperation in the gas sector, particularly, Russian gas supply to Georgia as well as its transit to third countries”, read a statement from the Russian gas giant following the meeting, adding that last year Gazprom  supplied 300 million cubic meters of gas to Georgia.

On October 17th, opponents gathered in front the government building in the Georgian capital Tbilisi for a protest action against Gazprom’s possible re-entry into the nation's energy market

According to local media, politicians, public activists and members of the National Movement joined to the rally “No to Gazprom”.

The potential deal with Gazprom has been criticized as a threat to national security and as a tool for Russia to increase its political influence in Georgia.

Georgia-Gazprom talks have also received negative comments in the Azeri media. The Azerbaijan state oil company, through its subsidiary Socar Energy Georgia, has become a major gas supplier and distributor in the neighboring country.

With the halt of Georgia buying gas from Russia in 2007, Socar established itself as a major player with its business growing significantly with the company gathering more than 80 percent of Georgia’s gas market.    

According to a head of Socar Energy Georgia Mahir Mamedov, the company is ready for competition with Gazprom in Georgia.

 “It is a free market and competition will only help to improve our services to customers. If Georgia decides to import more Russian gas, accordingly we will adjust our business to the new situation.   But we ready for competition with other players in Georgia gas market”, he said.

Mr. Mamedov urged not to dramatize the situation adding, that “a tension has been feeling rather in the newspaper pages than in reality”.

Socar Energy Georgia has long term gas agreement with Georgia government till 2025.  There is not any base to terminate or change it. Moreover, the gas price in Georgia for social consumers are comparable to gas prices in Russia and Azerbaijan, said Mamedov.  

Georgia receives 10 percent of volumes of gas that Russia pumps through its territory to Armenia as a transit fee. With expansion of the transit volumes Georgia will received additional gas.  

The political opposition in Georgia claims that the government pursuing their personal interests in positioning to replace energy resources from Azerbaijan with Russia.  

Georgia Prime Minister Irakli Garibashvili, who visited Baku to meet with Azeri President Aliyev on the same day as the public discussion was heated, called the rumors nonsense.

“There are no talks on diversification, replacement of Azerbaijani gas whatsoever; that’s utterly absurd and irresponsible politicians should not mislead people,” he said.

He told journalists that he visited Baku for “a routine, working, friendly meeting with President Aliyev.”

However the rumor said his unexpected visit was aiming to personally assure Azerbaijani President that there would be no change in Georgia’s energy relationship with Azerbaijan.

Azerbaijan not only main gas supplier to Georgia, it exported its main energy resources to the international markets via it's neighbors territory.

Gas transit will increase opening of the Southern Gas Corridor and gas flows from Azerbaijan's Shah Deniz-2 project.

Minister Kaladze said that the government is aiming to diversify the sources for energy supply, so the talks with Gazprom as well as other potential supplier will continue. For instance with Iran, he said.

Some experts consider the latest tensions around energy supply will be advantage for the government to get better conditions in gas supply and transit deal with Russia’s Gazprom.

Kama Mustafayeva