“Gas in Georgia, today, is as much as demanded”

Otar Kiria

The visit by President of Azerbaijan in Turkey has finally proved that gas line will pass through Georgia. After this, State Gas Company of Georgia has assigned the document on constructing the gas pipeline.

Moreover, as a proof of the fact that US new administration supports a.m. channel serves the visit of US government advisor In Caucasian Power Resource Questions, Mrs. Elizabeth Jones, which finally verified the positive attitude of US administration and interest with Trans Caucasian oil and gas. Skeptics failed forecasting Bush administration won’t support this project. For now, Georgian Gas International Corporation is too busy with prospective affairs.
At the stage of economy in transition, privatization process becomes the most important for development. Thus, prior comes the way it is implemented. World experience has proved that a.m. process carries one of the basic roles for countries in transition. Thereof, developing countries have chosen the patterns those have already been used and probated in the developed ones. Many of them profited much, many lesser, though each of managing process accurately finally achieved the positive result.
Unfortunately, in our case, that process likely to others went absolutely wrong. So the result did not slow down. Crisis already covered entire country. Exception is not the energetic sector of course.
What is the problem?
Problem is that we can not or even do not want to act. Anyway, privatization objects especially those of strategic mean were sold contradicting state’s favour and optimal interests. Nowadays, the most of investors mainly foreigners blame Georgians in discarding their conditions because of soviet mentality, as if they simply do not like the principles brought in from west. That is not true. People do not care about anything but results.
You may agree that we have to pay special attention to privatization, if it involves power industry within, as it is one of the strategic sectors for country at both economic and social sight either. Getting in touch with this, would be better if we separate two significant questions: energetic security of country and that of power industry itself generally provided by state.
Think we fail in both, as jeopardize power industry and entire country, because of running incorrect privatization process and management. Country – because of “huge enforcement and west directed policy” neither power nor gas industry is in order as well as distribution of these, which influences society and state budget negatively and finally country thereof. The power industry itself – because of incorrect policy, we degrade both technical and material sides of it.
Thereof, all of the two aspects frame the one whole and do present the important and fitting conditions. In case of power industry, this mistake is clear as a day. Rest of oil and gas do as follows: about oil we have to wait a little more until the Silk Road will save us or not; as to gas, it as well as we is still in uncertainty, as the tops of industry are yet unrevealed, accuracy of tariff policy remains haze, question of being transit country for gas Georgia leaves undefined etc. finally challenging the question will we have gas or not.
In July 9,2000 after the expiry of the agreement (on providing services for main gas pipeline) between Georgian Gas Intentional Corporation (GGIC) and “Saktransgazmretsvi”, Georgian Gas Transportation Company Limited (GGTC) launched operation of high pressure main gas pipelines (total length 2000 km) owned by GGIC.
Activities of GGIC conditionally could be divided into two parts i.e. realization of transnational gas pipeline projects and operation of existing local high-pressure main pipelines. GGIC has made a number of important changes in the sector since setting about to work with pipeline projects.
Stuffed by the experienced and qualified personnel, in the short period of time GGIC created new structures and services in the sector. The company’s crucial goal is to arrange gas metering, exploring, and eliminating gas losses in the main gas pipelines.
For the effective operation of the main gas pipeline system and uninterrupted gas delivery to the consumers, GGIC carried out the activities as follows:
? Gas metering station at Georgian-Armenian border near Tsiteli Bridge has been updated by share effort of experts from Gasprom and Armenian representatives. The above station has been certified and put under state standards. The existing but not operating modern equipment called Super Flow, which was installed not long ago, has been put in operation and consequently precise metering of transit gas to Armenia is available.
? GGIC managed to arrange gas meters existing in our country though in the nearest future the modern ones should replace those meters.
? Following the arrangements, gas losses were sharply decreased. For comparison: if in the first half of 2000 (the period when gas pipelines were operated by “Saktransgazmretsvi”) gas loss made up 98,5 million bcm, within the subsequent 7 months, namely the period when the gas pipelines were operated by the GGIC – the average monthly loss of 83,5 million bcm was decreased by 4,2 million bcm.
? In one year working period, 6.5 million GEL were contributed into State Budget, of which: 5,5 millions – into Central Budget, 0,3 millions – into Local Budget, 0,5 millions – customs duties, 0,2 millions into road fund. Paid out wages and economic charges of the Company and its Affiliates made up 1 million GEL. Unfortunately, liabilities of some organizations to the Company make up 5.5 million GEL, of which 4,4 millions are shared by State organizations.
Due to the importance of transit function of Georgia, GGIC presently is involved in three main projects, namely Delivery of Azeri gas from the Shah Deniz Field to Turkey through Georgian territory; Turkmenistan-Azerbaijan-Georgia-Turkey so called Trans Caspian gas pipeline and Transportation of gas from Russia to the third countries through Georgian territory.
For this moment, more important then works carried out for perfection of system is to know how real they are and what amount will they collect for State Budget especially if stipulate existing critical environment in power industry of country.
Alexander Gotsiridze, The President of GGIC: Getting in touch with energetic crisis, I can only explain the questions concerning gas sector. Today, Georgia provides the whole of demanded gas, or the volume that is important for 9th and 10th blocks of electricity distributing Gardabani Station as well as for additional 4th one; for Tbilicy City and the large number of consumers. Gas, today, goes where money is paid.
All those projects previously much alleged are now becoming the reality, in any case, GGIC and Ministry of Energetic do prove so. The most important among a.m. threes is the project of Shah Deniz Field being worked out by BP AMOCO and Shah Deniz Group. According to our information, technical group of BP AMOCO has already set about to work for preparation operations. While, the end of April will be the date for intergovernmental and international negotiations between partner countries.
FOR NOTE
Fife months ago, President Shevardnadze had announced the permission allowing BP AMOCO to start up the preparation works including ecological, social, channel and other important questions.
Despite all highlighted above, moment of distrust is not new for any of us challenging finally the question as follows: What will be the favour of Turkey up from it?
The thing is that at this moment Turkey is aimed at developing the power industry in country. As country needs gas for accomplishing the a.m. purpose, the above project is too important. However, it could only be the view from our side and reality vice versa. As a reason for more doubt, could be the stagnation of Khobuleti-Khopa pipeline.
In case if official Turkey decides to enlarge the Khopa power distributing station it will need gas delivery without fail. And the nearest to Khopa is Khobuleti pipeline that’s in Adjara, Georgia. Right that intention gave a birth to Khobuleti-Khopa pipeline.
A question more: Then what does Turkey wait for?
David Mirtskhulava, Minister for Energetic of Georgia: If there is a trouble with Khobuleti-Khopa project, it can only be the challenge of Turkey’s strategy to develop power industry more or not. The thing is that, two years ago advance of Khopa power distributing station was one of strategic purposes, but for now, it may be no longer so and the priority can go to another more larger project.
FOR NOTE
Turkey’s power industry market is monopolized by TH Co. Nowadays the Parliament of Turkey is going to enact the act on demonopolization.
Alexander Gotsiridze: Information about demonopolization and enlargement of Khopa power station have already been proved by Minister for Energetic of Turkey when the President Shevardnadze visited country. As soon as the act on demonopolization is enacted, the above project will have all of the sides including seller, transitory and acceptor, which will finally cause the work start up.
Georgian side has already implemented all of the responsibilities by the agreement. Project had set about to work in March 2001 and will finish in 2003-2004. Project price comprises 2,5 billion dollars. As to probable amount contributed into State Budget, Mr. Gotsiridze is unaware of this question as the tariffs, charges and dates are still unrevealed.
As to Trans Caspian project, according to information by Gas Corporation, negotiations between Turkmenistan, Azerbaijan and Georgia has already started and the stagnation of project, as Mr. Gotsiridze explained, was caused by existing political problems around Georgia and partner countries.