Azerbaijani state energy company, SOCAR, said on January 29 that it has negotiated with South Caucasus Pipeline Company to increase gas supplies to Georgia during the winter period by 50 million cubic meters.
The Georgian Energy Ministry said that gas supplies have increased from 3 million to 3.2 million cubic meters per day, but it is still not enough to fully fill gap the country has during gas consumption peak in winter.
Georgia receives gas from two sources in Azerbaijan – one directly from SOCAR and another one from the BP-operated South Caucasus Pipeline (SCP), which transports gas from Shah Deniz offshore field in the Caspian Sea to Turkey via Georgia. Gas supplies from these sources accounted for 88.5% of Georgia’s total gas needs in 2015.
President of SOCAR, Rovnag Abdullayev, visited Tbilisi and discussed possible increase of gas supplies from Azerbaijan on January 13. Chief executive of SOCAR’s Georgian subsidiary said at the time the company would try to increase supplies through its operated pipeline, which requires upgrade, and on the other hand through SCP.
“At the request of Georgian side, SOCAR negotiated the optimization of gas supply to Georgia and reached an agreement with the parties to Shah Deniz and South Caucasus Pipeline consortium on revision of seasonal limitation determined by the contracts on gas supply to Georgia,” SOCAR said in a statement on January 29.
“Support for the Georgia’s request is the sign of good neighborly relations between Azerbaijan and Georgia and creates basis for the development of mutually beneficial cooperation in the future,” the Azerbaijani state energy company said.
South Caucasus Pipeline Company shareholders are BP (28.8%), AzSCP (10%), TPAO (19%), Petronas (15.5%), Lukoil (10%), NICO (10%) and SGC Midstream (6.7%)
In parallel Georgia is negotiating with Gazprom terms of transit of the Russian gas to Armenia via Georgia and possible additional supplies of gas from Russia.
Georgia received 200 million cubic meters from Russia’s Gazprom as a fee for transiting Russian gas to Armenia and on top of that Georgia also imported 75 million cubic meters of gas from Russia in 2015.
Gazprom wants to monetize transit fee and pay cash instead of giving Georgia 10% of gas transported to Armenia. If monetized, Georgia may not receive enough cash to buy the same amount of gas it is now receiving as a transit fee. Negotiations on transit terms are still ongoing.
“Today [when gas consumption is at its peak during winter] our daily gas consumption is more than 11 million cubic meters,” Mariam Valishvili, the Georgian Deputy Energy Minister, said.
“Gas supply from the South Caucasus Pipeline has increased from 3 million to 3.2 million cubic meters per day… Gas supply directly from SOCAR is about 6.5 million cubic meters per day. Regrettably we still have a gap, which is being filled by around 2 million cubic meters of Russian gas per day that we take from the pipeline [which transports Russian gas to Armenia],” she added.