Georgia Unveils Some Details of Azeri Gas Deal

Georgia will buy gas from Azerbaijani state company, SOCAR, for USD 167 per 1,000 cubic meters for retail and USD 143 per 1,000 cubic meters for power generation, Alexandre Khetaguri, the Georgian Energy Minister, said on November 20.

Gas supply prices will not be increased throughout the next five years, according to a five-year memorandum of understanding signed by the Georgian government and SOCAR in Baku last week, the Energy Ministry said in a statement.

According to the deal SOCAR will provide 1.05 billion cubic meters of gas to Georgia in 2009 and 963 million cubic meters in 2010.

Georgia needs total of at least 1.8 billion cubic meters of gas per year.

Minister Khetaguri said that the deal guaranteed that the current gas tariff for households – 50.62 Tetri (over USD 0.3) per cubic meter – would remain unchanged for the next five years.

Gas tariff for enterprises and companies was increased from August, 2008 and is now 69 Tetri (about USD 0.58) per cubic meter. 

KazTransGaz-Tbilisi, a Kazakh state owned company distributing gas in the capital city, acknowledged that it planned to further increase gas tariff for enterprises up to 82 Tetri per cubic meter in connection with recent depreciation of the Georgian Lari against U.S. dollar. The company, however, said it had eventually decided to keep tariffs unchanged.

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