Shah Deniz prospects
06 February, 2014
Shah Deniz prospects
The long expected final decision on the second phase of the South Caucasus Pipeline transporting gas from Azerbaijan’s Shah Deniz offshore gas field to Europe via Georgia and Turkey was made at the end of 2013. Georgia as a transit country has great expectations from both geopolitical and economic points of view.
The Shah Deniz Stage 2 project is set to bring gas directly from Azerbaijan to Europe for the first time, opening up the Southern Gas Corridor. Th
is corridor is projected to counter the 35-year gas supply monopoly of Russian Gazprom to Europe, particularly to its South-Eastern countries, and to enhance the geopolitical importance of transit countries. Georgian analysts expect that the strengthened political importance of Georgia will ease the Euro-integration process.
On the economic side, the Georgian government expects USD 400-700 million investments in the country from implementation of the Shah Deniz second phase, adding a further 16 billion cubic meters of gas (bcm) per year to approximately 6-7 bcm of the first phase currently operational. Europe has already contracted 10 bcm per year, through 25-year contracts, and Turkey is taking 6 bcm.
The first gas from the Shah Deniz II project is expected by 2018 for consumers in Turkey and Georgia, and a year later to Europe - Greece, Bulgaria and Italy. The project also entails construction of the Trans Anatolian Gas Pipeline (TANAP) across Turkey, and construction of the Trans Adriatic Pipeline (TAP) across Greece, Albania and into Italy.
Expansion of the 690km long South Caucasus Pipeline (SCP), which began in 2006, envisages the building of a new pipeline with a length of up to 400 kilometers, 55 of which will be built in Georgia in parallel to the existing SCP. In addition, construction of two compression stations is also planned.
This may bring USD 400-700 million into Georgia. But according to the official brochure of the Shah Deniz II project, its implementation is expected to provide USD 2 billion in direct foreign investment to Georgia, and 20% of the capital expenditure is planned to be spent on goods and services provided by local Georgian suppliers.
Around two thousand jobs will be created through construction projects in Georgia. Pipes and other construction materials will be shipped via the port of Poti on the Black Sea and then onwards by railway to Azerbaijan. Besides, the contract on transit allows Georgia to buy 5% of gas transported through the pipeline at a preferential price. According to energy sector researchers, if the pipeline is filled by the expected 16 bcm, Georgia will get 800 million cubic meters of gas on the cheap. Should the first stage capacity of about 6 bcm be put in place, Georgia may gain 1.1 bcm of cheap gas.
According to Liana Jervalidze, an energy analyst in transit issues, Shah Deniz 2 is of critical importance to Georgia. The country may receive higher volumes of cheap gas at last. But in fact the first stage did not justify expectations, and instead of the estimated 9 bcm of peak capacity, only 50-60% was transported.
Accordingly, instead of the expected 300 million cm of cheap gas, Georgia enjoyed just around 200 million cm yearly. “Our benefit from the Shah Deniz pipeline is the transit fee, and the bigger the transported volume, the higher benefit we get. Even if 80% of the expected 16 bcm is transported, it will be great for us,” Jervalidze said.
She believes extra volumes of cheap gas will open new investment opportunities to Georgian industry. The upcoming 230 megawatt thermal station in Gardabani may use this gas; also, an industrial zone created near Poti port that is unused may get revived and developed – cheap energy prices may attract investors to the zone. Besides, there is talk that the first stage gas may amount to zero by 2022.

Print
Other Stories
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
10 Reasons to buy an apartment in the suburbs
There is a tendency for Tbilisi dwellers to move from central parts of the capital to the suburbs.
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.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
21.04.2019
22.04.2019
USD
1
USD
2.6935
2.6935
EUR
1
EUR
3.0291
3.0291
GBP
1
GBP
3.5021
3.5021
RUB
100
RUB
4.2126
4.2126
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
2.6935
EUR
1
EUR
3.0291
GBP
1
GBP
3.5021
RUB
100
RUB
4.2126
April 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
29 30