Georgia to Switch to Financial Payment System with Gazprom


Georgian Minister of Energy Kakha Kaladze has confirmed that Georgia will switch to a financial compensation plan with Gazprom in exchange for allowing the transport of Russian natural gas into Armenia as of 2018.

For 2017, Georgia will continue to receive 10% of all Russian gas transported through Georgia.

“The previous agreement with Gazprom expired on December 31, however, after several rounds of negotiations we managed to come to an optimal agreement. The Government of Georgia has discussed the deal and decided to sign the agreement. I want to emphasize that Georgia’s dependency on Russian gas will not rise because of this agreement. The only thing that will change is the method of payment, which involves financial compensation instead of receiving a percentage of natural gas. Regarding the cost of the transit, I can say that this will be one of the highest among European countries”, stated Kaladze.

Under the current deal, 2.4 billion cubic meters of gas are annually piped through Georgia to Armenia. Of that, .3 billion is received by Georgia free of charge.

Gazrprom offered a similar deal last year in 2016. However, the direction of the negotiations changed in March 2016 when Kaladze and the President of Azerbaijan’s SOCAR, Rovnag Abdullayev, signed a contract increasing the amount of Azerbaijani gas to be delivered to Georgia.

On December 13, Kakha Kaladze had a meeting with Gazprom representatives in Vienna, however, they were unable to reach an agreement.


Log in or Register