Georgia reaches new agreement with Russian Gazprom:
Monetary compensation in return for transit rights

Georgia will shift to a system of financial compensation with Russian energy giant Gazprom for the transit of Russian gas through Georgia into Armenia.

At today’s government meeting the Government of Georgia decided to sign a new two-year agreement with Gazprom as the former agreement expired on December 31, 2016.

The new agreement entails monetary compensation for the transport of Russian gas to Armenia through Georgia in place of the former arrangement, which afforded Georgia 10 percent of all natural gas transported through the country.

After several rounds of negotiations, we have reached a deal with Gazprom and accepted an optimal proposal from them. Under the new agreement, Georgia’s dependence on Russian energy resources will not increase. Only the payment conditions have been changed. And it will be one of the highest transit fees among European countries”, said Georgian Energy Minister Kakha Kaladze.

The Minister further explained that the agreement of 2016 will remain valid for 2017, after which the new payment system will come into effect.

In addition Kaladze said Georgia may receive additional gas supplies from Russia in order to fill the deficit during the winter months when gas consumption is higher.

We will be able to receive additional gas supply for a reduced price – for $185 instead of $215 [per 1,000 m3] ,” said Kaladze.

In 2013, Gazprom and Gazprom Armenia signed the contract for up to 2.5 billion cubic meters of Russian gas to be supplied annually to Armenia in 2014–2018. On April 7, 2016, an addendum to the contract was signed. Gas is delivered to the Armenian border by Gazprom Export. In 2015, Gazprom supplied Armenia with 1.9 billion cubic meters of gas.