LIANA JERVALIDZEEXPERT ON ENERGY AND REGIONAL ISSUES

INTERNATIONAL SCHOOL OF CAUCASUS STUDIES, YLIA STATE UNIVERSITY

KIEV, NOVEMBER 5 2010,

Transit Country- Case Georgia

04/22/23

1

Liana Jervalidze

Content

04/22/23Liana Jervalidze

2

Georgia, historical Transit Country for Azerbaijani Oil Existing International Energy Transportation Projects: BTC,

BTE,

Problems with Expansion of these Projects and potential solutions Existing Regional Energy Transportation Projects: Baku/Supsa

oil pipeline, North South gas pipeline

Problems of expansion and potential solutions

Georgia’s Domestic Market: Electricity (liberal, open, export oriented) Gas Oil products

Solutions: Transparent and Stable Transit Conditions

First Organized Oil business in Baku 1580 1604, Transportation through Georgia and Iraqi Port of

Basra

04/22/23Liana Jervalidze

3

Geoffrey Decket, on mission of UK to Iranian court organized this business

It came to the end in 1604 when Persian authorities decided to take it under control

Transit through Georgia to Europe and South East Asia, under Nobels and

Rothshields

04/22/23Liana Jervalidze

4

Existing International Energy Transportation Projects: BTC,

04/22/23Liana Jervalidze

5

BTC commissioned in 2006, current capacity 50 mln tons per year

Oil Transit trough Georgia

04/22/23Liana Jervalidze

6

BTC -45 mln tons

Baku/Supsa 8- 10 mln tons

Railway- 8-10mln tons

Problems of Oil Transit Expansion

04/22/23Liana Jervalidze

7

Competition by Russian, Chinese and Iranian Routes blocking the development of CrossCaspian Infrastructure

Political tensions between Georgia and Russia

Gas Transit through Georgia: BTE, North/South gas pipeline

04/22/23Liana Jervalidze

8

Baku/Tbilisi/Erzurum gas pipeline – 6.6 bcm per year

North-South gas pipeline – 6 bcm per year

Current total transit of gas – 6. 5 (2009)

Problems of Gas Transit Expansion

04/22/23Liana Jervalidze

9 Difficulties of

Azerbaijani/Turkish negotiations on Azerbaijani gas transit

Blockages on the way of building of TransCaspian gas pipeline

Lack of assurance on the demand side on European market

Solutions of Gas Transit Expansion in South Caucasus Corridor

04/22/23Liana Jervalidze

10

Building of Azerbaijani/Turkmen interconnector on the Caspian sea to open the western route for Turkmen gas

Solutions of Gas Transit Expansion in South Caucasus Corridor

04/22/23Liana Jervalidze

11

CNG and/or LNG terminals on the Black sea

Main Problems of Gas Transit Expansion

04/22/23Liana Jervalidze

12

Strong competition by transit routes across Russia, China and Iran

Concerns regarding the demand on gas in EU

Georgia’s Domestic Market:Electricity (liberal, open, export oriented)

04/22/23Liana Jervalidze

1370-80% based on

hydro power pending on the level of precipitation

Further development of Hydro

Transmission lines renovated or built new

Well connected with neighboring countries grids

Totally privatized with some exceptions

Access to export infrastructure

Georgia’s Domestic Market: dependent on one source but different suppliers

04/22/23Liana Jervalidze

14

Suppliers: SOCAR and Shakh Deniz Consortium

Transit fee in kind 10% from North/South corridor

Annex 2: Georgia’s Domestic and Internal Gas Pipeline Network, Existing and Projected

Source : GIOGC

Solutions

04/22/23Liana Jervalidze

16

Transparent and Stable Transit Conditions across the Transit Chain

Develop CrossCaspian & CrossBlack Sea Transit Networks

Adopt and Implement Similar, competitive and acceptable for Parties Interested transit conditions

04/22/23Liana Jervalidze 17

Thank You for Attention