God’s Gift Revealed: Georgia Could Become a Key European Energy Supplier

A US independent oil and gas exploration and production company early this month revealed that extensive geologic and geophysical studies within and between the Mtsare Khevi Gas Complex and the Taribani Field Complex areas could be part of a common geologic complex.  As a result, ongoing exploration studies have confirmed an extensive integrated gas resource potential that is much larger than previously identified.

On October 8, Frontera Resources Corporation, an independent oil and gas exploration and production company, released the groundbreaking announcement of a significant upgrade to gas resources associated with its ongoing exploration and production efforts in Georgia.

The Company says that it had continued to advance its natural gas focus within its eastern Georgia holdings by combining the technical focus of its Mtsare Khevi Gas Complex and Taribani Field Complex into one integrated 2,000 square kilometer geologic unit named the South Kakheti Gas Complex. 

It is surprising that, in addition to gas resources previously identified for subsets of this combined area, Frontera’s ongoing work recently concluded a new estimation of as much as 135 trillion cubic feet (3.8 trillion cubic meters) of gas in place of reservoir targets found between 300 metres and 5,000 metres in depth. 

The official information disclosed by Frontera early this month on its website says that extensive geologic and geophysical studies continued within and between the Mtsare Khevi Gas Complex and the Taribani Field Complex areas as the Company has believed that these areas are part of a common geologic complex.  “As a result, ongoing exploration studies have confirmed an extensive integrated gas resource potential that is much larger than previously identified.”

Frontera claims that continuous gas sales from the area have represented first-time domestically produced non-associated gas being continuously marketed to Georgia’s national consumption market. “Together with extensive technical analysis associated with the greater South Kakheti Gas Complex, this work has opened an historic new chapter in Georgia’s move towards energy independence as well as providing gas to markets beyond its borders,” Frontera declares.

On 13 July 2015, the Frontera Resources Corporation signed a strategic Memorandum of Understanding (MOU) with Ukraine’s national energy company, National Joint Stock Company Naftogaz of Ukraine, whereby an engineering FEED study is underway related to the possibility of bringing liquefied natural gas (LNG) to Ukraine from Frontera’s ongoing upstream gas works in Georgia. Frontera says similar studies are in progress related to other trans-Black Sea markets as well as contemplated regional pipeline routes.

Several months prior to this recent revolutionary finding, Frontera disclosed information, saying: “The MOU serves to establish a focused joint effort to work together in upstream exploration and production projects in Ukraine, as well as to study the possibility to bring liquefied natural gas (LNG) to Ukraine from Frontera’s ongoing work in Georgia.”

As Steve C. Nicandros, Frontera’s Chairman and CEO says, [their] ongoing investments in Georgia have continued to reveal the emergence of what [they] believe to be a world class gas play with the identification of the South Kakheti Gas Complex.

Much like the recent evolution of similarly prolific gas plays in the United States that have transformed the country’s energy independence trajectory, Frontera’s results continue to indicate that Georgia has the natural gas resources to follow a similar path. “We believe that our ongoing work will further serve to establish Georgia’s domestic energy independence in the years to come and also make it a strategic supplier of gas to Turkish and European consumption markets,” the company’s CEO concludes.

For the Frontera Press Release, click here.

Analysis by Georgia Today’s Zviad Adzinbaia

The recent nontrivial discovery by Frontera will almost certainly confirm that this field is in the top 10 largest gas fields on the planet. Some American experts say that it is likely to be confirmed at around 100 trillion cubic feet recoverable and will therefore rank as the 6th largest, just behind Russia’s giant Shtokman field, while Azerbaijan’s Shah Deniz field is currently ranked 18th largest at 42 tcf (Trillion Cubic Feet).  

The Shah Deniz field is currently the key reserve for the Southern Gas Corridor project, an initiative of the European Commission for gas supply from Caspian and Middle Eastern regions to Europe. Conveniently, the designated pipeline route of the Southern Gas Corridor travels across this new field in Georgia using existing infrastructure; relatively, the status of Georgia as a transit country will quickly be redefined as ‘key supplier.’

Energy experts believe that even though the South Kakheti Gas Complex is still in relatively early stages of development, possible high-caliber global interest is likely to guarantee that this strategic asset will be very quickly developed.

The occasion may literally change the entire geostrategic picture not only in the region of the Caucasus, but also the Black Sea and Europe. More lucidly, Europe, which currently suffers from an over-dependence on Russian energy resources, will be able to diversify its energy sector through Georgia, previously considered no more than a transit corridor for various projects including Trans Anatolia Pipeline (TANAP – that will open in 2018).

At the same time, it is critically questionable that neither the Georgian political establishment nor other system properties, such as the official US or the European side, has commented on a matter which can drastically transform the existing Russian energy domination on wider Europe.

Instead, Georgian Energy Minister Kakha Kaladze has been negotiating with Russia’s energy giant Gazprom, which is believed to be widely utilized for fulfilling Putin’s government’s political and Geopolitical interests. The Minister declares that Gazprom could fill a “gap caused by the energy shortage of Azerbaijan”, Georgia’s main gas and oil supplier since 2006, when Russia endeavored Georgia to pay its political price for Euro-Atlantic aspiration and, as a result, cut gas supply in the cold winter.

There is a reasonable notion that the case could be politically ‘muted’. One could recall an example of a miserable person winning a billion on the lottery and eventually finds herself in such agony that neither believes in the authenticity of the fact nor is fully aware of what this could mean for his future. Moreover, at this stage, disclosing this world-shattering information could be exceedingly risky for both the Georgian government and the country’s national security.

Likewise, this possible “god’s gift” for economically vulnerable Georgians will most likely make Russia less than pleased. In fact, as the business looks quite multifaceted, it could be no mere coincidence that Georgia’s occupied region of Tskhinvali has announced a possible referendum to join the Russian Federation and Georgian Energy Minister has announced the Gazprom deal. Notably, within two days of Frontera’s announcement, Georgian Prime Minister visited Baku in an urgent manner to meet his Azeri counterpart Ilham Aliyev. The President of Azerbaijan is set to visit Georgia in the beginning of November.

Georgia Today will keep you updated.

Zviad Adzinbaia is an Analyst at newspaper Georgia Today (covering regional politics, security, Russia-Georgia affairs and issues of Georgia’s Euro-Atlantic integration). He is also a fellow of a number of high-caliber programs at Georgian Foundation for Strategic and International Studies (GFSIS).

Zviad Adzinbaia

22 October 2015 22:23