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 business associations establish Georgian Tourism Industry Alliance
Business associations representing various sector of the hospitality industry in Georgia agreed to establish Georgian Tourism Industry Alliance (GTIA).
IMF approves $200 million for Georgia
The Executive Board of the International Monetary Fund has approved US$200 million financing to Georgia to address the effects of the COVID19 pandemic.
Georgia will be one of the first to open tourist corridors, Economy minister vows
Georgia’s Minister of Economy and Sustainable Development Natia Turnava pledged that Georgia would be one of the first countries to open safe tourist corridors with other countries.
Georgia’s GDP may contract 4%, the worst in the region amid pandemic
International Monetary Fund forecasts a 4% contraction of Georgia’s economy, which very much depends on tourism and money transfers.
Georgian retailers fight for survival as coronavirus pandemic continues
Pandemic has affected everyone worldwide, but one of the most vulnerable are retailers, those who depend on consumers and their spending.
Georgia remains the fifth in terms of budget transparency
According to the 2019 Open Budget Survey (OBS), conducted by the International Budget Partnership (IBP), Georgia got 81 points out of 100 in state budget transparency, the Transparency International Georgia said on Wednesday.
Georgia to receive €1.16 million for agriculture development
Within the GRETA project, the EU, Sweden and Austria launched the Local Development Initiative (LDI), to create great economic opportunities in the organic agriculture sector for farmers, farmer groups, cooperatives, processing units as well as other actors along various organic value chains.
Products rotten amid nationwide lockdown in Georgia
Food chain security is becoming more and more important as lockdown stays in place and farmers cannot transport their products from one place to another.
Georgian government to spend GEL 3.5 billion within crisis management plan
Georgian government has introduced a crisis management plan that consists of different stages. GEL 3.5 billion will be spent to cushion economy but this amount does not cover the post-crisis recovery period.
Georgia to receive €183 million from EU to fight Coronavirus
Due to the economic crisis caused by the pandemic of the coronavirus disease COVID-19, the EU has proposed a new package of macro-financial assistance.
Air traffic to be halted until May 22, GCAA says
Air traffic in Georgia will stay halted until May 22, 2020, Georgian Civil Aviation Agency says in a statement.
Georgian PM discusses support packages from ADB, EBRD
Prime Minister of Georgia Giorgi Gakharia held a video conference with the presidents of the EBRD and ADB regarding the possible assistance and financial resources to be allocated to Georgia due to the challenges associated with the global pandemic.
EBRD to provide €1 billion to Georgia, other countries
The EBRD and Georgia are stepping up cooperation as the country's economy faces the challenge of the coronavirus outbreak – says an official statement published on ebrd.com.
Government closes ski resorts in Georgia over COVID-19
The season at the ski resorts of Georgia closes ahead of schedule, the Prime Minister’s spokesman, Irakli Chikovani, said at a briefing.
Georgia will export armored vehicle Didgori Warrior
A new Georgian armored vehicle Didgori, equipped with a 120mm mobile mortar module, will be exported under the agreement signed between the Military Scientific-Technical Center Delta and one of the countries of the Middle East, the Ministry of Defence said.
Korter: Reliable housing property data in Georgia
It's not a simple job to find fresh homes. But when you use the estate choice service Korter, everything becomes distinct.
Rent a car in Tbilisi – Parent.ge
Are you thinking of booking the best vehicles for your next trip at a very reasonable price? If yes, then this is one of the best decisions you can ever make for yourself.
Pleasant Sunday for the whole family – Renewed Sunday’s brunch at The Biltmore Tbilisi Hotel
Summer, the season of endless fun and vacations, has ended and Tbilisi has become a usually crowded city.
GEL devalues, officials show optimism though
Devaluation of the national currency has sent shockwaves among citizens in Georgia. Officials think that the trend will return to its normal frame, though.
ProCredit Bank’s 20 years of challenges and successes in Georgia and what it means to be a responsible bank
“The bank’s 20-year long presence in Georgia was marked by many challenges and success stories.
Comments on alarming GEL devaluation
The National Bank of Georgia set a new exchange rate, according to which, dollar price became GEL 2.9507 on Tuesday.
Euronews and Silknet sign an MOU to launch “Euronews Georgia”
Euronews and Silknet, Georgia’s leading telecommunications company, are announcing the signing of an MOU in view of launching Euronews Georgia, a news channel and digital platform aimed at a Georgian-speaking audience.
Green Diamond starts to hand over flats to owners as second stage of construction finishes
Second stage of construction of Green Diamond living apartments by MAQRO Construction has finished and process of hand over of flats to owners has started.
Georgian wine tasting in the US came off excellently
Georgian wine tasting in the main cities of the US, New York, Chicago, and Boston went off excellently.
The most wanted fruits from Georgia
The fruit exportation has decreased in Georgia. According to Geostat (National Statistics Office of Georgia), this year, up until May Georgia exported 25 939 300 USD worth of fruit – 6 771 300 USD less than in 2018.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
25.05.2020
26.05.2020
USD
1
USD
3.1916
3.1916
EUR
1
EUR
3.4795
3.4801
GBP
1
GBP
3.8845
3.8890
RUB
100
RUB
4.4459
4.4615
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
3.1916
EUR
1
EUR
3.4801
GBP
1
GBP
3.8890
RUB
100
RUB
4.4615
May 2020
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 29 30 31