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Georgian Rail Corridor to Suffer 30% Loss – Company Warns

The volume of oil transported through the Azerbaijan-Georgia rail corridor is expected to fall by 30% to 9.5 million tonnes in 2007, down from 12.5 million tonnes during the previous year.

Batumi Oil Terminal (BOT), owned by Greenoak Group, cited the ?unilateral tariff increases? by the Azerbaijani side over the past two years as a significant factor, which had made the Azerbaijan-Georgia rail corridor ?increasingly uncompetitive.?

The volume of Kazakh and Turkmen crude oil delivered through the corridor, which previously averaged about 500,000 tonnes per month, has recently fallen to 100,000 tonnes per month.

?These lost shipments are now being delivered to Iran,? BOT said.

?Of even greater concern is that the Kazakh producer, Tengizchevroil, has begun rail exports through Odessa, Ukraine. This oil was previously intended for export through the Aktau-Baku route.?

BOT has called on the Azerbaijani side to stop abusing its monopoly, as it was jeopardizing the rail corridor. This was particularly important now that the State Oil Company of Azerbaijan (SOCAR) had purchased an oil terminal in Kulevi on Georgia?s Black Sea coast.

BOT said it is the responsibility of the Georgian government to intervene and ?correct? the situation.

The state-run Georgian Railway has declined a request for an official comment, citing absence of Irakli Ezugbaia, chief of the company. Ezugbaia is in the Azerbaijani capital Baku for a working visit.

Kulevi oil terminal was purchased from Georgian tycoon Badri Patarkatsishvili last year for an undisclosed sum. It has the potential to challenge the monopoly which Batumi Oil Terminal holds in Georgia.

SOCAR Energy Georgia, a subsidiary of the Azerbaijani state-run company, plans to put Kulevi oil terminal into operation this year. The terminal?s current capacity is 10 million tons, but reportedly SOCAR plans to increase it to 20 million tons per annum.

Meanwhile, SOCAR Energy Georgia is planning to set up at least 20 petrol stations throughout the country.

This post is also available in: ქართული (Georgian) Русский (Russian)


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