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LIVE

Friday, 09 January, 2009, 01:10 GMT | more >>

Georgia hunts for new gas supplies

By Upstream staff

Georgia plans cut its dependency on Russian gas - possibly by as much as 50% - by the end of next year by striking deals with Azerbaijan, Iran and Turkey, the country's Prime Minister Zurab Nogaideli said today.

Nogaideli, whose country is locked in a poltical dispute with Moscow, said in an interview that Russia was using the price of its gas for political purposes.

Russian state-owned Gazprom has demanded Georgia next year should pay $230 per 1000 cubic metres of gas instead of the $110 per Mcm it pays now, and has threatened to shut off supplies if Georgia refuses to pay up.

Nogaideli claimed Gazprom's tariff for Armenia is "formally $110 but actually $64", while Ukraine pays $130 per Mcm.

"It's very clear this is a political price," he said, adding Georgia was prepared to discuss prices commercially at a company-to-company level but not negotiate politically.

"At the same time our policy is to diversify our supplies," the prime minister said.

"I think we will be diversifying up to 50% of our supplies already next year, while we are 100% dependent on Russian supplies now. We are discussing supplies with Azerbaijan and Iran and to reconduct gas from Turkey."

Nogaideli said price was not the only problem in dealing with Russia.

"You need a long-term understanding from your partner (supplier). We want to diversify as much as possible but at the same time this is not an anti-Russian move," he said.

Nogaideli has previously rejected an offer from Gazprom to soften the price increase if Tbilisi hands over control of its domestic gas distribution network to Russia.

Russia cut off imports from Georgia and severed most transport links after the pro-Western former Soviet republic briefly detained four Russian soldiers for alleged espionage in September.