Georgian Leader Signals Gas Deal with Azerbaijan

President Saakashvili hinted on November 29 that Azerbaijan is willing to provide Georgia with natural gas, as Tbilisi desperately seeks alternative supplies to ease energy dependency on Russia.

President Saakashvili met with his Azeri counterpart Ilham Aliyev on the sidelines of the CIS summit in Minsk on November 28.

“I think this winter will become a historic example of brotherly relations between Azerbaijan and Georgia,” Saakashvili told reporters in London, where he arrived overnight after Minsk summit.

He did not specify whether any concrete deal was reached during the meeting or elaborate further details of talks.

“During the meeting, the two Presidents discussed issues related to the further enhancement of bilateral ties in various fields. Other issues of mutual interests were also discussed,” official Azerbaijani news agency AzerTag reported. No other details were given in the report.

Meanwhile, Georgian Prime Minister Zurab Nogaideli, accompanied by Energy Minister Nika Gilauri, will pay a one-day working visit to Azerbaijan on November 30. Nogaideli said that Georgia may achieve a favorable “re-contracting” of the Shah-Deniz gas deal.

Georgia wants to buy more gas from Azerbaijan’s Shah-Deniz field than is currently envisaged by the South Caucasus Gas Pipeline contract. Turkey and Azerbaijan are also part of the contract.

Georgia is expected to receive 200 million cubic meters of gas as a transit fee plus 50 million cubic meters at a reduced price from the new pipeline, which will transport Azeri gas to Turkey via Georgia starting next year. 

PM Nogaideli noted that in the meantime, gas distribution companies in Georgia are currently in talks with the Gazprom’s export arm.

“These talks with Gazexport are being held in Yerevan [Armenia] because, for various reasons, it was impossible to hold these talks in Moscow,” PM Nogaideli said.

Russia’s monopoly Gazprom told Georgia that it wants USD 230 per 1000 cubic meters of gas in 2007. Georgia currently pays USD 110 per 1000 cubic meters.
 
PM Nogaideli also noted that in late December he will participate in a joint Georgian-Iranian economic commission in Tehran to finally define the terms of gas supply from Iran.
 
U.S. Ambassador to Georgia John Tefft said in a recent interview that Washington does not approve of Georgia having long-term strategic energy-related cooperation with Iran.

Georgia conducted its first emergency gas imports from Iran in January, 2006 after blasts on two gas pipes in Russia’s North Ossetia disrupted supplies in Georgia.

The capacity of the Georgian-Azerbaijani gas pipeline used for the import of Iranian gas from January 30 to February 5, 2006, was 4 million cubic meters per day,  roughly half of Georgia’s daily winter consumption.

Sources close to the government say Tbilisi is trying to reduce the share of Russian gas in Georgia’s total consumption as much as possible.

But some opponents have warned that by totally rejecting Russian gas Georgia may become dependent on another supplier.

“The government was telling us that they are trying to diversify energy supplies, but instead it seems that they are just changing them. Real diversification means having various supplies, meaning that country will not depend on a single energy provider,” Davit Ebralidze, energy expert affiliated with the opposition Republican Party, told RFE/RL Georgian Service on November 29.