Alexander Medvedev, general director at Gazexport
Photo: Dmitry Lekay
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Georgia Yields to Gas Prices of Gazprom
Unexpected problems at Shah Deniz field in Azerbaijan that were announced past Friday have drastically changed the alignment of gas forces in the region. The tricky point is that exactly that Azeri field was expected to meet a portion of Georgia’s gas requirements in winter. On the same day, Georgia yielded to Gazprom, having agreed to buy gas at $235/ths cu meters, while Azerbaijan is to decide on the gas purchase in Russia today.
The talks of Georgia, Azerbaijan and Turkey about shipping gas from Shah Deniz to Transcaucasia started at the end of November. The parties announced they could do without the gas of Gazprom in mid.-December, after the tour of Georgian President Mikhail Saakashvili to Ankara.
The Turkish quota at Shah Deniz (developed by the BP-led consortium) amounts to 2.8 billion cu meters of gas. Turkey said it won’t need the gas in 2007 and Georgia and Azerbaijan counted on sharing the quota to manage without Gazprom, which hiked the prices to $235/ths cu meters.
But it turned out there is no gas of Shah Deniz available. Late on Friday, the State Oil Company of Azerbaijan announced that gas production from the first well at Shah Deniz had been suspended for technical reasons. The remaining three wells of the field are to be put into operation in January and Georgia and Azerbaijan will have no gas in the gas balance from January 1.
What exactly has happened at Shah-Deniz is yet unclear. The explanations differ from the terrorist action to some technical reasons. The Azeri political analysts say the official Baku preferred not to clash with Russia and said no to Tbilisi.
Almost simultaneously with the announced explosion at Shah Deniz, Georgia and Russia’s Gazexport said that Georgia will buy 1.1 billion cu meters of gas in 2007 at $235/ths cu meters.
www.kommersant.com
All the Article in Russian as of Dec. 25, 2006
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