CanArgo, Georgia Sign Gas Sales Agreement
The CanArgo Energy Corporation, which is an oil and gas exploration and production company operating in former Soviet states, signed a take-or-pay agreement with the Georgian government on the supply of natural gas to the country, CanArgo said on March 3.
The agreement was signed by David Robson, President of CanArgo and Georgian Energy Minister Nika Gilauri in the presence of Prime Minister Zurab Nogaideli on the sideline of the Invest in Georgia forum, which was held in New York on March 2.
According to the agreement, CanArgo will supply gas from the Kumisi gas prospect, near Tbilisi, based on a pricing formula under which gas is initially supplied at the Contract Price of USD 55 per thousand cubic meters and increased up to USD 80 per thousand cubic meters by the tenth contract year; After 10 years, the price will be based on the price changes of heavy fuel in the European Union.
“We are very happy to have executed this gas purchase agreement and we are looking forward to further mutual co-operation with CanArgo. Georgia needs to develop its domestic gas resources to reduce its dependence on imports and the success of this project will go some way towards achieving this,” Energy Minister Nika Gilauri said after signing the contract.
“I am extremely pleased to have signed this Memorandum of Understanding with the Ministry of Energy of Georgia. This contract gives us the commercial security to move ahead with the Kumisi gas prospect which we believe has very good potential to satisfy a large proportion of Georgia’s future gas demands,” David Robson, the President of CanArgo, said.
