Gazprom Comments on New Transit Terms with Georgia

Gazprom commented on the new terms of Russian gas transit to Armenia via Georgia with a statement on January 13, saying that the two sides have found “optimal commercial terms,” following “lengthy” negotiations.

“Gazprom Export and the Georgian side reached an agreement on the terms of Russian gas transit to Armenia through Georgia. The parties agreed to shift to currency transactions for reimbursing the transit services,” Gazprom’s statement reads.

“In accordance with the agreement, the Russian side guarantees paying for the transit of Russian gas through Georgia to Armenia in 2017-2018 in the volume of 2.0-2.2 billion cubic meters per year, as well as supplying Georgia with natural gas on flexible terms at the price lower by USD 30 per 1000 cubic meters than in 2016,” Gazprom added.

„As a result of series of meetings and lengthy negotiations with Georgian partners, we have managed to find commercial terms optimal for both sides, and to reach an agreement on the terms of gas transit,” Director General of Gazprom Export LLC Elena Burmistrova was quoted as saying.

Georgian Energy Minister Kakha Kaladze said on January 11 following the third round of talks with executives of Gazprom Export that the Georgian government made “an optimal” decision on agreeing to Gazprom’s proposal on terms of Russian gas transit to Armenia via Georgia, according to which, during the first year of the two-year contract, Georgia will partially maintain the commodity payment scheme and move to full monetary reimbursement in the second year. Kaladze added that if Georgia requires additional natural gas, it will pay USD 185 per 1000 cubic meters of Russian gas "instead of USD 215."

The government’s decision to agree on the new terms has raised questions in Georgian CSOs and political parties.

The Coalition for Euro-Atlantic Georgia, which gathers 23 civil society organizations, watchdog groups and think tanks, issued a statement on January 12 saying that the new transit terms with Russia’s energy giant Gazprom “worsen the country’s energy security” and calling on the government to disclose the agreement details.

UNM lawmakers described the government’s decision to accept Gazprom’s terms as “an act of capitulation” and “a very dangerous decision” for the country’s security.