Security Concerns Increased Over Strategic Pipeline

Shah-Deniz Gas Project Ensures Georgia’s Need in Energy Resources

On March 14 the Government of Georgia and investors of Shah-Deniz natural gas field concluded a contract on construction of Baku-Tbilisi-Erzerum Gas Pipeline. Ensuring security of the pipeline is the main concern of the investors.

The contract was concluded in the framework of the International Conference on Oil, Gas and Energy of Georgia. Special Advisor to the US President for Energy Issues of the Caspian Region Steven Mann, Deputy Minister of Foreign Affairs of the Russian Federation Viktor Kaluzhny, Energy Minister of Armenia Armen Movsisyan and President of British Petroleum Azerbaijan David Woodword were among other participants of the conference.

In the first 40 years of operation of the pipeline, Georgia will receive 5 % of transported gas free of charge – 40 billion cubic meters annually, 2.5 more then Georgia presently consumes. As the president of Georgian International Oil Corporation Gia Chanturia says this will bring Georgia 2.6 billion USD profit in total over 40 years.

Security issues during implementation the of 15 billion dollar project in the region, where, as the US government says, terrorists linked to Al-Qaida are hiding, acquire the utmost importance.

After meeting with President Shevardnadze on March 14, Advisor for Energy Issues of the Caspian Region Steven Mann stated that the United States “will do its utmost to ensure Georgia’s energetic security. This is a most important issue. We are confident that we will achieve success in this respect”. 

According to Steven Mann’s statement, the parties engaged in the project already are in process of consultations on pipeline security issues.

On March 16 Georgian President is leaving for Brussels for negotiations with NATO and European structures. Gia Chanturia says that security issues of Baku-Tbilisi-Erzerum pipeline will be discussed during the visit as well.

Considering importance of security of the pipeline, another conference, dedicated completely to the security measures for gas and oil pipelines is scheduled for May in Tbilisi.

As the President of Azerbaijan State Oil Corporation Natik Aliev says, construction of the pipeline will start in the end of 2002 and will finish in year 2004. First stream of gas will be delivered to Turkey from Azerbaijan via Georgia in 2005.

Current consortium partners are 7 companies: BP – 25.5 %, Statoil – 25.5 %, SOCAR (State Oil Company of Azerbaijan) -10 %, LUKAGIP (a subsidiary of LUKoil and Agip) – 10 %, ELF – 10%, OIEC (Oil Industries Engineering and Construction, Iran) – 10% and TPAC (Turkish Petroleum Corporation) – 9% of shares.

Steven Mann emphasizes two aspects of the project – economical and political. Together with pure economic profit, the project will bring to Georgia an energetic independence as well. At present the only provider of natural gas to Georgia is the Russian company “Itera”. This circumstance often is being used as a tool of political pressure over Georgia by the Russian side.

President Shevardnadze also underlined political aspect of the project, when he called the Baku-Tbilisi-Erzerum project “a guarantee for peace in the Caucasus”.

By Giorgi Sepashvili, Civil Georgia