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Georgia improving as gas transportation option

Georgia is continuing to strengthen its position as a transportation option for gas, and a legitimate alternative to Russia, with recent developments bolstering this assessment.

Key to this is the expansion of the Caucasus Pipeline, a natural gas pipeline from the Caspian Sea to the European market, which is set to not only improve transportation prospects, but boost the overall geopolitical strength of the region.

Major importance

The importance of recent advancements has not been lost on the government, with Georgian Prime Minister Irakli Garibashvili highlighting this at the recent inauguration of a port terminal in Poti, which is part of the second stage of development of Azerbaijan’s giant Shah Deniz field in the Caspian Sea.

"The terminal as part of the Shah Deniz-2 project will transport the pipes and other equipment required for the expansion of the South Caucasus Pipeline through Azerbaijan and Georgia," he explained.

He also stressed the overall importance of the Shah Deniz-2 project, adding: "This is one of the most difficult and complex energy projects, which will strengthen the geopolitical positions of Azerbaijan and Georgia."

Shah Deniz will deliver around 560 billion cubic feet of natural gas per year, with sales scheduled for Georgia and Turkey in 2018 and the rest to Europe the following year, with hopes that it will diversify a natural gas market that is currently largely dependent on Russia.

Broad shift

For the former Soviet republic Georgia, it represents something of a broader shift away from the Kremlin, though Georgian President Giorgi Margvelashvili has stated his intention to move the country closer to the European Union while also repairing ties with Russia.

New tenders and contracts will remain central to Georgia's ambition to galvanise its expanding position on the global gas and oil stage and provide a serious alternative to Russia.

Gas produced at the second stage of the Shah Deniz field development will be the main source of the Southern Gas Corridor, which foresees the transportation of the Caspian gas to European markets, and Georgia is not resting on its laurels.

A major project is underway to expand the Caucasus pipeline and Georgia is repairing its own pipelines gradually, with work on the 25km Tsiteli Khidi-Marneuli section of the main gas pipeline being performed by the Georgian Oil and Gas Corporation.

At the moment, excavation is taking place in the pipeline corridor, after corrosion began to develop on certain sections of the 36-year-old Tsiteli Khidi-Tsalka-Akhalkalaki Gas Pipeline, resulting in the new Tsiteli Khidi -  Marneuli section being developed.

Ongoing developments

Several other tenders are also live, including for the procurement of materials for the construction of the 30km Khashuri - Gori section of the East–West Main Gas Pipeline and the 2 km Ulevi section of the Main Gas Pipeline.

Meanwhile, the GOGC is planning to implement the Ninotsminda field project in order to deliver excess gas obtained from the Ninotsminda field to the main gas pipeline network, while next year the 2015 Georgian Oil and Gas Corporation will build an 11 km oil pipeline and a gas reservoir with the capacity of 1000 cubic metres in a bid to further solidify the country's ever-expanding presence on the global stage.

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