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Agency WPS
The Russian Oil and Gas Report (Russia)
March 21, 2005, Monday
THE US IS AVERSE TO PRIVATIZATION OF GEORGIAN GAS PIPELINES
The US, which is attentively watching the actions of Tbilisi, is
trying to prevent Gazprom from acquisition of control over the
Georgian trunk gas pipelines. Georgian State Minister Kakha
Bendukidze, supporter of privatization, is convinced that thus
Americans wish to get rid of a potential competitor.
In February 2005, President of Georgia Mikhail Saakashvili announced
that the country might sell its pipeline system and was negotiating
on this with Gazprom. Now Gazprom uses the Georgian pipelines
belonging to the state for gas transit to Turkey and Armenia.
Throughput capacity of the pipelines is about 7-8 billion cubic
meters of gas per year. The pipes are seriously worn out and their
repair requires investment of $200 million within the next five
years. The current gas flow via Georgia is 50% less than the gas flow
during the Soviet times.
On March 17, American Ambassador to Georgia Richard Miles announced
that Georgian privatization "should not create problems for strategic
interests and security of the country." According to Miles, the
system of Georgian trunk gas pipelines should remain in state
ownership because a private owner would become a monopoly by
definition. In response ideologist of the Georgian privatization,
State Minister for Economic and Structural Reforms Kakha Bendukidze,
said that in reality Miles was concerned not about security of
Georgia but about possible growth of competition on the part of
Gazprom. According to Bendukidze, Americans undertook lobbying of
interests of investors of the South Caucasian gas pipeline being
built from the Azerbaijani Shah Deniz field to Turkey, reserves of
the offshore Shah Deniz field in the Caspian Sea amount to 1 trillion
cubic meters of natural gas and 300 million cubic meters of gas
condensate. Participants of the project worth $3.2 billion are
British BP (25.5%), Norwegian Statoil (25.5%), Azerbaijani SOCAR
(10%), LUKAgip belonging to LUKoil (10%), Iranian NICO (10%) and
Turkish TPAO (9%).
Roman Gotseridze, chair of the financial budget committee of the
Georgian parliament and opponent of sale of the Georgian pipelines to
Gazprom, is convinced that in any case "we should not privatize the
pipelines until the energy security of the country is insured."
Gotseridze explains that acquisition of the gas pipelines by Russia
may strengthen dependence of Georgia on Russian fuel. Thus, when
Gazprom buys the pipelines it will be able to prevent access of
Azerbaijani gas (the Shah Deniz project makes such provisions) to
Georgia. Gotseridze also explains that from the commercial standpoint
the worn out Georgian gas pipelines cannot be interesting for
Gazprom, which means that the company wants to buy them for purposes
different from business. Along with this, adds Gotseridze, such deal
will guarantee gas supplies to "Russia's strategic partner Armenia."
According to him, the parliament does not support the privatization
and only Bendukidze advocates it in the government.
Lev Snykov from Sovlink Securities states that the US tries to hinder
expansion of Gazprom in Georgia proceeding from political reasons.
The expert concludes that for the US Georgia is a transit route for
Caspian fuel that is why the US is not interested in broadening of
Gazprom's presence in Georgia.
Gazprom started negotiations on a possibility to privatize Georgian
trunk gas pipelines back in 2003 with the government of Eduard
Shevardnadze. At that time member of the Executive Board of Gazprom
Mikhail Axelrod said that the company was interested in acquisition
of the Georgian trunk gas pipelines to export gas to Turkey and
Armenia through them. On March 17, a spokesperson for Gazprom
confirmed that his company was still interested in acquisition of the
Georgian gas pipelines.
Source: Vedomosti, March 18, 2005
The Russian Oil and Gas Report (Russia)
March 21, 2005, Monday
THE US IS AVERSE TO PRIVATIZATION OF GEORGIAN GAS PIPELINES
The US, which is attentively watching the actions of Tbilisi, is
trying to prevent Gazprom from acquisition of control over the
Georgian trunk gas pipelines. Georgian State Minister Kakha
Bendukidze, supporter of privatization, is convinced that thus
Americans wish to get rid of a potential competitor.
In February 2005, President of Georgia Mikhail Saakashvili announced
that the country might sell its pipeline system and was negotiating
on this with Gazprom. Now Gazprom uses the Georgian pipelines
belonging to the state for gas transit to Turkey and Armenia.
Throughput capacity of the pipelines is about 7-8 billion cubic
meters of gas per year. The pipes are seriously worn out and their
repair requires investment of $200 million within the next five
years. The current gas flow via Georgia is 50% less than the gas flow
during the Soviet times.
On March 17, American Ambassador to Georgia Richard Miles announced
that Georgian privatization "should not create problems for strategic
interests and security of the country." According to Miles, the
system of Georgian trunk gas pipelines should remain in state
ownership because a private owner would become a monopoly by
definition. In response ideologist of the Georgian privatization,
State Minister for Economic and Structural Reforms Kakha Bendukidze,
said that in reality Miles was concerned not about security of
Georgia but about possible growth of competition on the part of
Gazprom. According to Bendukidze, Americans undertook lobbying of
interests of investors of the South Caucasian gas pipeline being
built from the Azerbaijani Shah Deniz field to Turkey, reserves of
the offshore Shah Deniz field in the Caspian Sea amount to 1 trillion
cubic meters of natural gas and 300 million cubic meters of gas
condensate. Participants of the project worth $3.2 billion are
British BP (25.5%), Norwegian Statoil (25.5%), Azerbaijani SOCAR
(10%), LUKAgip belonging to LUKoil (10%), Iranian NICO (10%) and
Turkish TPAO (9%).
Roman Gotseridze, chair of the financial budget committee of the
Georgian parliament and opponent of sale of the Georgian pipelines to
Gazprom, is convinced that in any case "we should not privatize the
pipelines until the energy security of the country is insured."
Gotseridze explains that acquisition of the gas pipelines by Russia
may strengthen dependence of Georgia on Russian fuel. Thus, when
Gazprom buys the pipelines it will be able to prevent access of
Azerbaijani gas (the Shah Deniz project makes such provisions) to
Georgia. Gotseridze also explains that from the commercial standpoint
the worn out Georgian gas pipelines cannot be interesting for
Gazprom, which means that the company wants to buy them for purposes
different from business. Along with this, adds Gotseridze, such deal
will guarantee gas supplies to "Russia's strategic partner Armenia."
According to him, the parliament does not support the privatization
and only Bendukidze advocates it in the government.
Lev Snykov from Sovlink Securities states that the US tries to hinder
expansion of Gazprom in Georgia proceeding from political reasons.
The expert concludes that for the US Georgia is a transit route for
Caspian fuel that is why the US is not interested in broadening of
Gazprom's presence in Georgia.
Gazprom started negotiations on a possibility to privatize Georgian
trunk gas pipelines back in 2003 with the government of Eduard
Shevardnadze. At that time member of the Executive Board of Gazprom
Mikhail Axelrod said that the company was interested in acquisition
of the Georgian trunk gas pipelines to export gas to Turkey and
Armenia through them. On March 17, a spokesperson for Gazprom
confirmed that his company was still interested in acquisition of the
Georgian gas pipelines.
Source: Vedomosti, March 18, 2005