Georgia is in intensive talks with Azerbaijan and Turkey to secure the purchase of more cheap Shah-Deniz gas, Energy Minister Nika Gilauri told lawmakers on November 10. No details of the talks were disclosed.

Gilauri was brought to Parliament to brief lawmakers about the energy situation in Georgia on the eve of an anticipated gas price hike by Russia in 2007.

The Energy Minister said that Georgia has managed to rehabilitate its energy system, and now it even has enough capacity to export electricity, including 180 megawatts to Turkey. He also said that imports of Russian electricity are no longer included in Georgia’s balance of electricity consumption.

But problems remain with diversifying gas supplies. Russia’s Gazprom said that from January 2007 it wants USD 230 per 1000 cubic meters instead of the current USD 110.

Gilauri said that Georgia will receive a guaranteed 250 million cubic meters of gas from Shah-Deniz in 2007, “which is, of course, not enough,” he added.

Current talks with Azerbaijan and Turkey involve Georgia’s need for more cheap Shah-Deniz gas. But it remains unclear what the cause of the protracted talks is – a lack of available gas, or a difference in price.

Minister Gilauri reiterated that the government has no plans to sell the country’s trunk gas pipeline to the Gazprom.

MPs from the ruling party hailed measures undertaken by the authorities to secure electricity supplies. But some lawmakers warned about the possible negative consequences of the recent privatization of energy facilities by the Czech company Energo-Pro.

In June, 2006 the Georgian government announced that Energo-Pro won a privatization bid for two electricity distribution companies and six hydroelectric power plants after pledging to pay USD 312,3 million.

But Energy Minister Nika Gilauri told lawmakers on November 10 that negotiations with Energo-Pro are still underway. The company has only paid USD 12 million as deposit payment so far.

“We should be very careful in respect to Energo-Pro. Who is behind this company? This is a very serious question, because it is quite possible for Energo-Pro to one day announce its bankruptcy and hand over its assets to Russia’s state-owned UES,” Lado Papava, a parliamentarian from the ruling National Movement party, said.