Terms of Gas Deal Expected after Talks with Turkish PM

A final agreement with Turkey on the details of distribution of gas shares from the Shah-Deniz field is expected after talks with the Turkish Prime Minister Recep Tayyip Erdogan on December 21, Georgian Energy Minister Nika Gilauri said.

Gilauri, who is accompanying President Saakashvili on his official visit to Turkey, told Georgian reporters on December 20 that talks have been completed with the Azerbaijani side and “only technical details” concerning the schedule of gas delivery are currently being discussed.

“As far as Turkey is concerned, the price is actually agreed, but there will be some additional talks tomorrow. Talks [with the Turkish side] will also focus on the compensation Georgia will have to pay in exchange for Turkey’s decision to give up part of its gas quota [from the Shah-Deniz field in favor of Georgia]. Export of electricity is being considered as one of the options for [this compensation],” Gilauri said, but declined to elaborate further details.

After talks between energy ministers from the three countries in Tbilisi on December 8, Turkey said that it was ready to give 1,3 billion cubic meters of gas to Azerbaijan and 800 million cubic meters to Georgia from its originally defined share of 2,8 billion cubic meters.

Remarks by the Georgian Energy Minister have confirmed an earlier statement by Azerbaijani Energy Minister Natik Aliyev, who said on December 18 that “several difficulties” remain over how Georgia would pay for 800 million cubic meters of gas, which Turkey is ready to give up.

The statement by the Azerbaijani minister prompted Russian media sources to speculate that Georgia is failing in its attempt to receive additional gas supplies from Shah-Deniz. But Georgian Energy Minister Gilauri denied speculations as “yet another provocation by the Russian media sources.”

In Tbilisi, Georgian Prime Minister Zurab Nogaideli told the government session on December 20 that Azerbaijan will become Georgia’s major gas supplier in 2007.

He also said that President Saakashvili is now engaged in talks with the Turkish side over the final terms of distribution of Shah-Deniz gas shares.

PM Nogaideli said on December 13, while speaking at the Paul H. Nitze School of Advanced International Studies (SAIS) at the Johns Hopkins University in Washington, that Georgia will “decrease dependence [on Russian gas imports] to 20%, or maybe to 0%.”