Agreement on strategic cooperation between gazprom and the Government of Georgia came into force
On the 1st of July the Chairman of the Management Committee of Gazprom Alexey Miller and the Minister of Fuel and Energy of Georgia David Mirtskhulava signed an Agreement on strategic cooperation in the gas sector for the 25-year long period.
The following key directions of cooperation are fixed in the document:
- natural gas supply to Georgia and participation in gas sales to final consumers of the Republic;
- operation, rehabilitation, reconstruction and extension of the Georgian pipeline network;
- gas supplies to the Georgian heat power stations for power generation and its joint realization;
- elaboration of joint projects on the use of the transit capacities of the Georgian gas transmission system.
To solve the tasks, Gazprom and the Georgian Gas International Corporation (GGIC) are going to set up joint ventures intended to operate and construct gas pipelines and other facilities of the gas industry.
According to the document, the parties will sign an agreement on natural gas supply to Georgia and gas transit through the territory of the Republic. The volume and price of the gas supply, terms and conditions of delivery, payment procedure and transit rates will be determined on the basis of annual contracts between Gazprom and GGIC. Transit services will be partially paid for by gas deliveries.
The Georgian party will submit (in the III quarter of 2003) a list of joint implementation projects for approval as well as the information on the Republican gas sector privatization plans. The Government of Georgia commits itself to provide Gazprom with equal rights to participate in the privatization process.
In its turn, Gazprom will implement investment projects aimed at rehabilitation and reconstruction of the gas transmission system of Georgia, will supply necessary equipment, engage its research institutes in solution of the problems of the Republican gas sector as well as will ensure training of the Georgian specialists on the basis of the Company’s training centers.
There is no domestic gas production in Georgia. Natural gas import is the major source of gas supply to the Republic. The volume of gas imports amounts to 1.1 bcm annually.
At present, Gazprom does not supply natural gas to Georgia.
Information Directorate, OAO Gazprom