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Georgian Energy Minister Meets Gazprom CEO in Milan
Civil Georgia, Tbilisi / 27 Oct.'15 / 12:33

Georgia’s Energy Minister and Deputy PM, Kakha Kaladze, met chief executive of Russian gas monopoly Gazprom, Alexei Miller, in Milan on Monday.

It was the second meeting between Kaladze and Miller in a month.

“During the working meeting the sides discussed extending existing agreement on transit service and other technical issues. Terms and conditions for supply of additional volumes of natural gas were also discussed,” the Georgian Energy Ministry said in a brief statement.

Gazprom said in its press release that “transit of Russian gas through the Georgian territory and commercial supplies of [Russian gas to Georgia] were discussed.”

As a transit fee, Georgia receives 10% of total amount of gas transited by Russia to Armenia through the North-South gas pipeline, which runs through Georgia. 

After the previous meeting between the Georgian Energy Minister and Gazprom CEO, which was held in Brussels on September 25, Kaladze said that Georgia was ready to consider gas supplies from Gazprom on top of what the country is already receiving from the Russia’s state-controlled energy giant if the proposal is commercially viable. He and his deputy cited the need to diversify gas supplies.

After that announcement the government came under fierce criticism from the opposition groups.

On October 20 Energy Minister Kaladze reiterated that Georgia will have to buy gas from Gazprom on top of what the country is already receiving from Russia as a transit fee, claiming that “there is no possibility” to import additional volumes from Azerbaijan, which is the main supplier of gas to Georgia.

Kaladze also said that Georgia was receiving additional volumes of Russian gas on top of the transit fee in previous years as well.

He said that additional gas will be required to fill the gap amid increasing gas consumption in Georgia, which, he said, is expected to reach 2.5 billion cubic meters in 2015, a 27% increase since 2012.

According to the Georgian Energy Ministry data, from Azerbaijan the country received about 87.1% of its total consumption of 2.17 billion cubic meters of gas in 2014.

About 686 million cubic meters of Azerbaijani gas came as part of the deal in frames of the BP-operated South Caucasus Pipeline, which transports gas from Shah Deniz offshore field in the Caspian Sea to Turkey via Georgia. 1.21 billion cubic meters were imported as part of a separate contract with Azerbaijan.

Georgia received 267.7 million cubic meters of gas from Russia in 2014 of which 206.1 million was a transit fee for transporting Russian gas to Armenia, according to the Georgian Energy Ministry. In addition to that, Georgia also imported 61.6 million cubic meters of Russian gas in 2014.

Asked about Georgia’s talks with Gazprom over possible supply of additional gas and if it would pose a threat to Georgia’s energy security, U.S. Ambassador in Tbilisi, Ian Kelly, told journalists on October 22: “This is a sovereign decision for the people of Georgia and the government of Georgia to make in terms of their energy supplies.”

“I think as a general principle it is very important for any country’s energy security not to rely on a single provider, or only a handful of providers.  The important thing is diversification of suppliers. So, that would be my only comment on this,” the U.S. ambassador said.

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