Georgia-Gazprom Agreement on Gas Transit to Armenia Expires

Georgia’s agreement with the Russian energy giant Gazprom on gas transit to Armenia expired on December 31, 2018.

The agreement was reached on January 10, 2017 under which Georgia, as a transit country for the transportation of Russian gas to Armenia, during 2018 received payment from Gazprom.

Under the previous agreement, which expired on December 31, 2016, Russia was paying Georgia for gas transportation by supplying natural gas to the amount of 10% of the volume of the transported gas.

The recently expired agreement was many times criticized by the opposition and non-governmental sector, which claimed that for Georgia it was more profitable when it was getting gas, and not money, in exchange for transit to Armenia.

At present, the transit of natural gas from Russia to Armenia continues without an agreement and it remains unknown what kind of agreement will be reached between the sides, and when.

While commenting on the issue, Georgian Prime Minister Mamuka Bakhtadze told reporters that Georgia has no plans to abandon the function of being a transit country for Russian gas, and that it will continue to receive benefits.

The Prime Minister noted that Georgia receives quite a significant benefit from the transit, which complies with the interests of the country.

Asked whether Georgia plans to sign a new transit treaty with Gazprom, Bakhtatdze said if a new agreement is signed, the economy ministry will report the details.

Speaking about the future deal with Gazprom, Bakhtadze said as far as he knows, no changes have been made to the agreement.

Georgian Economy and Sustainable Development Minister Giorgi Kobulia confirmed that Georgia expects to complete talks on a new deal with Gazprom on the transit of Russian gas.

"At present, we are discussing a new agreement on the transit of Russian gas to Armenia. The terms of the previous contract will remain in force pending the end of those negotiations," he said.

"After the talks with Gazprom, which are expected to be completed within the coming two weeks, we will make the results public," he added, noting that the exact details of the negotiations themselves will be confidential.

Russia’s Gazprom owns the world’s largest gas transmission system with a total length of 172.1 thousand kilometers.

Gazprom sells more than half its gas to Russian consumers and exports gas to more than 30 countries within and beyond the former Soviet Union.

By Thea Morrison

Image source: Gazprom