Georgia quits buying natural gas from Gazprom in 2017

Georgia will not be receiving natural gas from Gazprom for the remainder of the year. The newly expected balance was approved on 7 April by the Minister of Energy, Kakhi Kaladze.

The government envisions to fully provide the population and the commercial sector with Azerbaijani gas starting from April, which will be implemented through Azerbaijani state oil company SOCAR and Shakh-Deniz (South Caucasus, Baku-Tbilisi-Erzurum gas pipeline).

According to the expected balance, Georgia’s gas supply for this year will be 2,457 cubic meters total, with import from Azerbaijan being 2,347 cbm (constituting 95.5%).

Azerbaijan is currently the main gas supplier to Georgia. Last year, Azerbaijan supplied the country with 87.1% of gas. Georgia buys Azeri gas at reduced prices: each 1000 cubic meters for the population – USD 120 and USD 143 per 1000 cubic meters for thermal stations. This is significantly lower compared to Gazprom’s offer to its strategic partner, Armenia. Gazprom sells gas to Armenia at USD 165. Georgia currently also receives gas from Russia, but the amount is much smaller compared to the supply provided by Azerbaijan.

In 2014 Georgia imported 267 773 000 cbm of gas, of which 206 166 000 cbm was the transit price through the 221 km long North-South pipeline to Armenia. Georgia gets 10% of the overall gas volume passing through the pipeline.

Last year Armenia received around 2.1 billion cbm of natural gas through the main pipeline via Georgia, of which 0.3 billion was taken by Georgia.

Gazprom is the largest Russian gas supplier in the world, of which 51% is owned by the Russian government.