German KfW, Georgia's Oil & Gas Corporation Sign Agreement

On August 24, the KfW Development Bank of Germany and Georgian Oil and Gas Corporation signed an agreement on the construction of an underground gas storage facility.

The agreement envisages allocation of €150 million for the construction of the facility.

The project will significantly increase Georgia’s energy security and solve seasonal imbalances between the supply and consumption of natural gas in the country, as well as satisfying peak consumption during the winter seasons.

David Tvalabeishvili, President of JSC Georgian Oil and Gas Corporation, and the German KfW Regional Director, Olaf Zimelka, signed the agreement.

The signing ceremony was also attended by Deputy Ministers of Economy and Sustainable Development of Georgia, Nino Enukidze and Giorgi Cherkezishvili, and the German Parliamentary Secretary for Economy and Energy, Thomas Bareiß.

Georgia’s Ministry of Economy and sustainable development reports that the JSC Georgian Oil and Gas Corporation will start construction works in 2019, while the facility will become operational in 2022.

Enukidze says the project is of great importance to Georgia and noted it will be a strategic object where the gas will be accumulated.

“We will use the stored gas when there is high demand in the country – during the winter season,” she said.

The signing of the contract took place during German Chancellor Angela Merkel’s two-day visit to Georgia.

As Georgian Prime Minister Mamuka Bakhtadze stated last week, “this project is important not only in terms of strengthening energy security, but also for stabilizing the gas supply during winter.”

By Thea Morrison