Energy Minister Responds to Gazprom Outcry

Georgian Energy Minister Kakha Kaladze said that the government took “rational and correct steps” in negotiations with Gazprom and blamed “marginal and unpopular individuals and groups” for organizing “a disinformation hysteria,” over the government’s decision to agree on monetization of the Russian gas transit fee to Armenia via Georgia.

The new agreement, with which, Georgia will partially maintain the commodity payment scheme in 2017 and move to full monetary reimbursement in 2018, has raised questions in President Giorgi Margvelashvili, opposition political parties and civil society organizations.

Speaking at a special press briefing on January 18, Kaladze blamed “certain political groups” for “exploiting” the issue. “We have provided sufficient information on the agreement through media. We also communicated to the presidential administration, experts and non-governmental organizations and it is unfortunate that I have to make [additional] explanations [on the statements] of certain political groups and affiliated organizations,” Kaladze added.

Responding to the concerns of civil society organizations and opposition political parties, that the new agreement worsens Georgia’s energy security, Kaladze noted that Georgia maintained “the same level of energy independence and the country’s transit function.” “The important thing is that the energy dependence [of Georgia] has not increased by a single percentage point and that we are maintaining an important transit function,” Kaladze explained.

“Only the payment method has changed, which we have told the public on the very first day [of the agreement] and scoring populist points with the statements that we have been hearing in the last days, is a political demagoguery,” Kaladze added.

He also responded to the president’s statement that the new agreement “harms Georgia’s political and economic interests,” calling it “unreasoned” and “unprofessional” and added that the president could instead retrieve the agreement details from the energy ministry.

Kaladze called the government’s decision “difficult but necessary” and added that the agreement was reached after several rounds of negotiations. “This was not that Gazprom drafted the contract and we agreed [easily]. We had multiple meetings and we reached an agreement during our last meeting. The new agreement that was signed is a maximum result in given circumstances, be it with political or economic respect.”

Speaking on the financial difference between the current and the last year’s contracts, Kaladze said that the financial benefits for Georgia would be lower only in 2018, but not in the first year, since Georgia will partially maintain the commodity payment scheme in 2017. He, however, did not disclose the further financial details of the agreement.