Russian Gas -Theoretical Option
16 May, 2013
Russian Gas -Theoretical Option
In quest of diversified gas supply, Georgian government discusses Russian gas as an alternative if it is reasonably priced. Sector pundits consider this option rather a theoretical one for it can scarcely compete with the double cheaper Azeri gas. Musing over energy security of Georgia, Kakhi Kaladze, Minister of Energy of Georgia, does not rule out Russian gas as an alternative supply option to Georgia depending on Azeri bulk supply at the moment. No talks are going on with Russia
at the moment but Russian gas will be imported only if it will have positive effect on Georgian gas, Minister accentuated on May 7, 2013.
“Our authorities will do everything to have two, three, four suppliers… This will increase competition and have a positive impact on prices,” Kaladze said and wondered why Georgia cannot buy Russian gas if it imports electricity from Russia all the time. Because of price, the sector pundits respond. They hold the idea of Russian gas-supply as something theoretical for it can never compete with Azeri gas in price and find comparison with the electricity irrelevant to this end: out of three electricity importers to Georgia Russian electricity is the cheapest compared to Azeri, Armenian and Turkish ones whilst Russian gas is double expensive than the Azeri one. Russia puts a political price on gas to Georgia as its political contender crying for the West. Secondly, Georgia’s small consumption is not commercially attractive to Russia to make discounts.
Therefore, Russian gas can be an option only under force majore situations or if Russia acquires a company in Georgia and will provide it by cheap gas. But the latter presumption cannot be conjectured as Georgia’s diversified gas-supply but just kind of inter-company strategy that cannot influence the price-making process at large, Liana Jervalidze, an energy expert said in the interview to Georgian Journal.
As a matter of fact Georgia has three diversified gas-supply routes: two running from Azerbaijani Shah-Deniz fields [including the Baku-Tbilisi-Erzurum (BTE) pipeline leaving 5% of the transported gas in Georgia as a transit fee] and the North-South pipeline running from Russia to Armenia through Georgia and leaving 10% of transported gas as a transit fee. Moreover, 500 million cubic meter (cm) is available at special discounts averaging to USD 60-62 per thousand cubic meter (tcm) in frames of BTE. The transited and discounted gas makes around half of Georgia’s overall gas consumption varying between 1.2-1.7 billion cm. The remainder part is provided by Azeri national company SOCAR including the so called social gas [meant for household consumption and thermal power stations] for preferential price of USD 189 per tcm and commercial gas for USD 240. Russia prices its gas to Georgia for USD 300-400 likewise to Europe but takes USD 110 per tcm from Russia’s strategic partner Armenia where gas goes through Georgia and transportation costs more apparently. According to sector pundits, even if Russia demanded the market price this might be by USD 50-70 higher than Azeri price. Firstly, the transportation route between Azerbaijan and Georgia is much shorter, secondly, Azerbaijan will always take into consideration interests of Georgia, its strategic partner in all regional transit projects: Azerbaijan has no other route than the one passing via Georgia to take its energy resources to international markets while Russia has an extensive pipeline ramification connecting with Europe and enjoys export rights on Kazakh and Turkmen gas transported through pipes of Gazprom, the Kremlin owned energy giant. This very obstacle hinders Georgia to import from either Middle Asian countries. Kazakh gas was supposed to be available at USD 110 per tcm after KazMunaiGas, the Kazakh state company, acquired gas distribution network of Georgian capital but Gazprom defies to give a passage to Tbilisi-bound Kazakh gas in spite of international obligations Russia assumed in frames of the World Trade Organization. WTO requires free passage to all kinds of goods through its member territory and perhaps this is the point Georgia should press on.
Print
Other Stories
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
The New York Times: Bitcoin declines but Georgia still bet on it
The New York Times has recently published an article about reasons, challenges and causes of generating Bitcoin in the former Soviet country Georgia.
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
Biblusi opens first shop for tourists - Georgian
The largest book shop in Georgia Biblusi opens the first shop specially designated to the needs and interests of tourists and named it Georgian.
Georgia improves by five ranks in the Prosperity Index
In the overall Prosperity Index rankings, Georgia has climbed by 5 positions from 85 to 80 when compared to last year. As such, Georgia is the best performing country in the CIS zone.
The future is bright for electric cars in Georgia
The numerous hybrid cars in the streets of Tbilisi cannot be overlooked. Entrepreneur Sulkhan Gvalia calls them “pagers”, referring to the predecessor of mobile phones.
Georgia’s fight against the big tiny enemy – Asian Parosana
It’s a tiny creature, but the harm it did to the Georgian agriculture sector was and still is immense.
New cable route: from Kobi to Gudauri in 15 minutes
On the 15th of December, cable transport is scheduled to be opened connecting Kobi and Gudauri.
Tourist boom in Gudauri – majority of hotels are booked by foreigners
Gudauri is among the most popular winter resorts in Georgia.
Medical tourism increases in Georgia
In the last 9 months, Georgia was visited by 19 500 foreigners for medical and recovery purposes.
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
16.02.2019
17.02.2019
USD
1
USD
2.6413
2.6413
EUR
1
EUR
2.9791
2.9791
GBP
1
GBP
3.3851
3.3851
RUB
100
RUB
3.9608
3.9608
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6413
EUR
1
EUR
2.9791
GBP
1
GBP
3.3851
RUB
100
RUB
3.9608
February 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28