“Gazprom” managed to attain the goal: Georgia will receive less money for gas transit
Georgian government eventually made a decision on agreeing to “Gazprom” company proposal. From now on, “Gazprom” will pay Georgia a specific amount for transit for the blue fuel supplied to Armenia. These negotiations were extended almost more than one and a half year becoming a reason or intense criticism for the Georgian Government. Recall that “Gazprom” has presented a tough demand on the Georgian side. Accordingly, the Russian company will pay a fixed amount for the gas supplied to Armenia thru the territory of Georgia. Until now, Russian company was paying Georgia 10 percent (in the form of raw material) of the volume of gas passing thru the pipeline. Tbilisi would not agree to this condition which prolongs the process of negotiations. Georgia did not agree to this condition which extended the process of negotiations. In the case of not accepting their offer, “Gazprom” threatens to terminate gas supply to Armenia through Georgia. In that case, Iran would become the gas supplier to Armenia. In that case, Georgia was going to lose not only the transit money but also the volume of gas which comes from Russia. Experts were claiming that this shortage will not be possible to fill in by Azerbaijani gas for at least several years.
While Azerbaijani President Ilham Aliyev and the leadership of Azerbaijani oil and gas “SOCAR” company claimed that they are capable of fully providing the gas demand of Georgia. An expert on Georgian studies, Alik Eroyants, used to consider these allegations capable still one year ago. In his opinion, especially in the winter months, the volume of gas consumption in Georgia increases, hence, the capacity of supply pipe from Azerbaijan to Georgia is not enough. The problem can be solved only by replacement of the pipeline or in the case of building a huge reservoir of gas storage tanks in Georgia which will require millions of dollars of investments. “Aravot” has interviewed the expert on Georgian studies, Alik Eroyants, regarding the agreement reached between “Gazprom” and the Government of Georgia.
– After long negotiations, after all, what agreement was reached between Russia and Georgia?
Read also
– I agree that the last almost one and a half year round of negotiations was long but I think that importantly the parties are not dissatisfied with the terms reached with the achieved agreement. The initiating party to dialogue with each other, essentially, was “Gazprom” company, and in fact, the latter attained the goal, even though the Russian side also resorted to some “price discounts”. In other words, the parties have made mutual concessions.
– The leading player in Georgian gas supply is Azerbaijani “SOCAR” company. How can “Gazprom” compete with the latter: to sign an agreement with Georgia on new terms and conditions?
– The problem is actually simpler than it seems, however, there is a bunch of political and economic factors. Tbilisi, as a rule, announces that it is guided by the realization of the interest of its own country, however, it made a move violating its own defined principle last spring. I am talking about the recent Georgian-Azerbaijani gas arrangement, with which Georgia was receiving an additional volume of gas necessary for Georgia as well as had the chance to refuse the Russian condition to substitute the transit raw material with fixed amount. However, later, it became clear that the mentioned agreement is not being implemented which can be explained by the fact that Azerbaijanis initially tried to “bluff” aiming to thwart the mentioned Russian-Georgian negotiations or another possible option. Georgian authorities, on the one hand, tried to gain time: the parliamentary elections are expected, and it was necessary to keep the segment of public filled with anti-Russianism away from the possible excessive frustration. On the other hand, Tbilisi further intensified the gas supply competition. The main goal, of course, was to extort more Georgiophile conditions from Russians. As a result, the Georgian Government turned out to be a winner too for bringing the mentioned two companies into a competition race, it obtained the chance to receive gas at a cheaper price. In other words, it can be stated that in addition to the Russian side, the outcome satisfied Georgians too.
– Eventually, what are the terms of achieved mutual agreement, and will Armenia benefit from this agreement?
– It is already clear that Georgia can buy the necessary additional volumes of gas from “Gazprom” at USD 185 instead of the previous USD 215. In other words, more affordable. And the amount of the 10 percent transit payment in the form of raw material is not identified. However, it is going to be a lower payment. In fact, the Russian side is already making savings, as a result, it is difficult to argue but it is possible that the price of Russian gas supplied to Armenia will drop too. In its turn, this will create an opportunity to reduce the tariff of gas supplied from Iran. In other words, the aforementioned process seems to be just evolving, and we can expect positive results from the discussions in the foreseeable future.
