Georgia and Gazprom hold second round of negotiations in Austria

Georgia’s Energy Minister Kakha Kaladze departs for Austria’ capital Vienna today to held the next round of negotiations with Russian energy giant Gazprom.

As Kaladze stated on Rustavi 2 TV yesterday this will be Georgia’s "another and possibly the final round of negotiations with Gazprom”.

The Minister said, a one-year contract with the Russian side will be signed and the public will be informed about the details after the completion of the negotiations.

The next meeting will be held in Vienna. I will take part in the meeting and will try to bring the results that will be acceptable and important for our country and our industry. The meeting will not be attended by [Gazprom’s CEO Alexey] Miller. As far as I am informed, Ms Elena Burmistova [Gazprom Export chief] will attend the meeting instead of him. After the meeting, I will provide you with the details", - said Kakha Kaladze.

Despite the natural gas supply deficit Kaladze said increase in gas price was "ruled out at this stage”.

We do not expect increase in gas price. You know how it happens – gas price reduces when oil price drops,” said the Minister.

Georgia’s energy challenges became a very active topic of discussions several months ago when the country’s Energy Minister declared Georgia "may not be able to receive enough natural gas from Azerbaijan” and that Georgia needed to "look for alternative sources of energy”.

Georgia’s Energy Minister further explained that the problem was not regarding Azerbaijan’s gas supply but with the capacity of two pipelines through which Georgia receives gas from Azerbaijan.

Meanwhile, large Russian energy company Gazprom offered Georgia to fill the natural gas supply deficit with Russian gas. Kaladze met the Russian company’s CEO, Alexey Miller who said after the meeting with Georgian officials that his company was interested in increasing supplies of gas to Armenia via Georgia. However, Miller also said Gazprom was prepared to sell gas to consumers in Georgia itself.

Yesterday, Kaladze said Gazprom had presented "an ultimatum” to Georgia. The Minister explained the Georgian side expressed "categorical opposition” to the Gazprom ultimatum that the price for the conveyed gas to be paid by money, but the company indicated that in other case they would import Iranian gas through Armenia.

You know that today 10 percent of the conveyed volume of gas is given to Georgia. However, Gazprom has presented an ultimatum to move to financial payment. This was news for us. We categorically objected to this, though they directly indicated that they can import Iranian gas through Armenia. There really exist such a danger and its consequences will be very grave for us,” said Kaladze.

When talking about threats, he opposed to the idea that Russia can exert pressure on Georgia only through Gazprom.

Unfortunately, to some extent, we are dependent on Russia from the energy point of view– we have been importing electricity from Russia for years, as it has best prices compared to other countries in the region. This relationship was not started by me. My predecessor ministers have built this relationship and I want to tell you that the relationship in the energy sector is really good. I'm not going to destroy this relationship built by my predecessors over the years. I am acting in the best interests of our country,” said Kaladze.

Meanwhile, Kaladze also explained the reasons of what has caused the natural gas supply deficit in Georgia. He said about 120,000 families living in Georgia were now supplied with natural gas. Also, new gas stations were built in Georgia and new enterprises were opened which use gas for the operations.

Kaladze said Georgia was not dependent on one source of energy and this was good for country’s energy diversification direction.

Diversification does not mean replacement. Any developed country tries not to be depended on one energy source. Georgia is not depended neither on Gazprom nor on SOCAR. We have the third opportunity – Shah Deniz gas field. This is the state’s own natural gas,” Kaladze said.

Meanwhile, Kaladze once again noted, Azerbaijan was Georgia's main partner.