Huge natural gas reserves discovered in eastern Georgia
03 February, 2016
Huge natural gas reserves discovered in eastern Georgia
Georgia, a low-middle-income country, could become a net exporter of gas rather than a net importer.
For Europe and the USA, Georgia, in terms of potential alternative sources of gas, has to become one of the top-priority countries.

This is
the topic discussed in the report prepared for the Atlantic Council, ‘Developing a Western Energy Strategy for the Black Sea Region and Beyond’.

The author of the report, Ariel Cohen thinks that Georgia has a potential to minimize the dependence on Russian energy resources.

‘Several countries that currently rely on Russian supplies, or serve as major transit corridors for Russian and Caspian gas, actually have ample hydrocarbon reserves. They can become independent or nearly independent as far as their natural gas supply is concerned. For example, Georgia has emerged as a potentially important hydrocarbon source for Europe’, - The head of Energy, Natural Resources and Geopolitical centre of USA, Ariel Cohen says.

As noted in the report, On October 8, 2015, Frontera Resources company has announced its discovery of massive resources of gas in eastern Georgia. The company estimates natural gas resources to be 3.8 trillion cubic meters.

’Provided the size of this large-scale discovery is confirmed independently, and geopolitical challenges are handled successfully, this means that Georgia, a low-middle-income country, could become a net exporter of gas rather than a net importer. The south Kakheti find can supply Turkey, Romania, Ukraine and European markets farther west. As these gas resources are brought to market, Georgia could export gas via a small-scale LNG terminal located on the Georgian Black Sea coast, or via the Main Export Pipeline to Turkey and TANAP’.

According to the report, today, Georgia provides transit for approximately two million barrels of oil equivalent per day into Turkey and Europe. In the future, the windfall profits for Georgia from energy exports could transform this low-middle-income country into a high-middle-income state, and provide the financial base for both the industrial development and an improved social safety net.

‘With Georgia’s role as an increasingly important east/west transit hub for oil and gas, becoming a significant producer and exporter would give the country more regional relevance. Given this, Georgia now has the opportunity to increase its importance to NATO and European energy security with its strategic location bordering the organization’s easternmost member, Turkey, as well as Russia’, - Cohen notes.

‘What Georgia needs today is supportive leadership, transparency, good governance and the rule of law – without these, foreign investments will remain severely constrained.

Its strategic location and reserves, together with considerable hydropower potential and the proximity of the energy-hungry Turkish market, could make Georgia a promising energy supplier to the whole Black Sea area and beyond.

Ariel Cohen also says that for the North-Atlantic Alliance, cooperation with Georgia should become one of the top-priority questions.

Related Story:

TANAP enlarges Georgia’s energy capacity
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USD
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EUR
1
EUR
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GBP
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GBP
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RUB
100
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