President Bush and Georgian President Saakashvili in Tblisi in 2005
On Saturday, November 4, the Doha, Qatar-based Gulf Times newspaper reported that Georgian officials are considering importing natural gas from Iran via Azerbaijan in the event Russia cuts them off this winter. While Georgia might have no other choice but to freeze or accept the prices Gazprom will dictate, maybe it's time for Americans to ask what U.S. vital interest will be served by Georgia sending more money to Teheran instead of Moscow.
Click on the extended post to read the full article.
Baku-Tblisi-Teheran? Not exactly what two U.S. Administrations intended
See also the Wikipedia entry for the Baku-Tblisi-Ceyhan (BTC) pipeline
Georgia eyes BP, Iran for replacing Russian energy
Publish Date: Saturday,4 November, 2006, at 09:24 AM Doha Time
TBILISI: Georgia believes gas from Iran and a BP-led project in Azerbaijan could fully replace Russian fuel after Moscow threatened to double prices amid a political row with Tbilisi, a minister said yesterday.
"It is technically possible to meet Georgia's gas demand (with alternative gas)," Georgia's Energy Minister Nika Gilauri told said.
"We can get three, four, five billion cubic metres of gas. Really, this is a subject for talks," he said.
Russia's gas monopoly Gazprom threatened on Thursday to more than double gas prices for Georgia from 2007 in a rise Tbilisi branded as political.
Russia has cut transport links with Georgia in a row rooted in Tbilisi's pro-Western policies and a fight for influence over separatist Georgian regions propped up by Moscow.
Gazprom wants Georgia to pay $230 per 1,000 cu m from 2007.
If that price becomes final the Caucasus state - where the World Bank says the average person's income is just over $100 a month - would be paying the same price as Gazprom's rich customers in the European Union.
Many analysts and politicians, including US Vice-President Dick Cheney, have said the Kremlin often uses its vast energy resources to blackmail its smaller neighbours.
In January, Gazprom briefly cut supplies to Ukraine following a pricing dispute with the pro-Western leadership in Kiev. The cutoff also briefly reduced transit supplies to Europe and shocked the European Union.
Georgia's best potential alternative is gas from the Shakh Deniz field off Azerbaijan's Caspian Sea coast. The field is operated by a consortium of BP and Norway's Statoil.
That consortium is completing work on a pipeline linking the field to the Turkish market, via Georgia.
Under its transit contract, Georgia from 2007 is entitled to take off the first 250mn cu m at a price of $63 per 1,000 cu m. It is unclear what price Georgia would pay for anything over that quota.
The link's total capacity is around 8bn cu m a year and Turkey will buy the bulk of this gas at the first stage. Capacity could then double if the group agrees to export more gas to southern Europe via Turkey.
Iran, which has the world's second largest gas reserves after Russia, has at times this year been supplying small volumes to Georgia. Gilauri said these volumes could rise.
Georgia, with a population of about 5mn people, consumes around 1.8bn cu m a year. Gazprom supplies most of this gas at a price of $110 per 1,000 cu m.
Meanwhile, Russia's ambassador in Minsk said yesterday that Moscow may raise gas prices for its political ally Belarus fourfold unless it is given some control of gas pipelines.
Such an increase could virtually destroy the Belarussian economy, which is still run along the Soviet-era command economy lines with the government controlling most prices and ordering companies what to produce.
Ambassador Alexander Surikov told a news conference Russia may raise gas prices for Belarus to $200 per 1,000 cu m from about $47 at the moment unless a deal allowing some degree of control over pipelines that carry gas to Russia's customers in Poland and Germany is reached.
"Today, we name a gas price for Belarus at $200 per 1,000 cu m," Surikov said.
Russia's gas giant Gazprom and Belarus have been in talks over creating a joint venture to manage gas pipelines for several years. But Minsk has repeatedly rejected Russian demands for more control over the pipelines.
President Alexander Lukashenko, accused in the West of crushing human rights and freedoms, has repeatedly defended low gas prices for Belarus, saying otherwise he might sever all relations with Russia.
Surikov also said Russia might cut oil supplies to Belarus significantly next year if the two sides fail to agree to unify duties on oil products refined at Belarussian refineries from Russian crude oil.
Surikov said Russia wanted Belarus to raise the duties to the Russian level of $180 from current $57. Moscow also wants Belarus to transfer up to 85% of the amount raised from the new oil products duties to the Russian state budget.
"A process of signing the balance for next year is suspended because Russia wants to discuss a question of sharing export duties," he said.
Belarus will receive 19.75mn tonnes of crude oil from Russia this year and wanted to ask it to raise supplies next year to 21.5mn tonnes.
Experts said Belarus received about $3.7bn in hard currency earnings from exporting oil products refined from the Russian crude.
"I am not saying that we are giving someone a gift now but let's share the duties," Surikov said.
Russia will also be unable to export electricity to Belarus next year as Moscow would need more to cover domestic demand.
Russia is Belarus's main political ally. Lukashenko plans to meet Russian President Vladimir Putin in Moscow next week to discuss the issues.