Gas Storage Facility to Be Constructed in Georgia

Georgian authorities are planning to construct an underground natural gas storage facility “to strengthen the country’s energy security and independence,” Prime Minister Mamuka Bakhtadze announced before the cabinet meeting on August 17.

Bakhtadze said the project, worth 150 million Euros, will be funded as part of a loan agreement between the German state-owned KfW Development Bank and Georgia’s Oil and Gas Corporation, which operates energy pipelines in the country.

The Prime Minister stressed the gas storage facility would be “of strategic significance.” “The facility will close the gap between gas supply and consumption and meet the consumption demands in the peak months of winter,” Mamuka Bakhtadze noted.

Economy Minister Giorgi Kobulia commented on the matter as well, telling reporters that the facility would secure the country against potential risks. “The storage facility will have gas reserves sufficient for thirty to forty-five days,” Giorgi Kobulia noted.

“The project will also be commercially very feasible; we will be able to buy gas when it is cheap, and use it when gas prices are high,” the Economy Minister added.

Gas Supply Statistics

According to the Georgia’s Energy and Water Supply Regulatory Commission’s annual report for 2017, natural gas accounted for 31% of Georgia’s overall energy consumption. The country received a total of 2.3 billion cubic meters of gas in the reporting period.

Azerbaijan was Georgia’s main source of gas supply: the country received about 94% of its total consumption in 2017. One billion cubic meters (42.8%) of Azerbaijani gas came as part of the deal in frames of the BP-operated South Caucasus Pipeline, which transports gas from the Shah Deniz offshore field in the Caspian Sea to Turkey via Georgia. 1.2 billion cubic meters (51.2%) were imported as part of a separate contract with Azerbaijan.

Georgia received 134.5 million cubic meters (5.7%) of gas from the Russian Federation in 2017 as a transit fee for transporting gas from Russia to Armenia. The country’s own production remains to be limited, accounting for 0.3% of natural gas supply only.

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