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Shah Deniz Stage 2 of Fundamental Importance for Georgia

The second stage of development of Azerbaijan’s largest Shah Deniz gas field is of fundamental importance for Georgia, said Georgia’s Deputy Energy Minister Mariam Valishvili in an interview with Business Time Georgia.

One of the main issues in the development of Georgia’s energy market in the next few years is the launch of the expanded South Caucasus Pipeline as part of Shah Deniz 2 and construction of an underground gas storage facility, according to her.

“In response to the increased consumption [of gas], we already have a 10-year plan for infrastructure development. It is necessary to build a gas storage facility. Gas storage facilities allow flexibly regulating supply volumes,” she said.

“According to the contract signed with the Shah Deniz consortium, there is a restriction, under which in case Georgia is unable to use the supplied gas, it will lose those gas volumes, and at the same time, we have no re-export opportunity.”

Valishvili added that in summer, when consumption is not high, Georgia will be able to accumulate these volumes in the gas storage facility and use them in peak season.

Reserves of the Shah Deniz field are estimated at 1.2 trillion cubic meters of gas. Shah Deniz Stage 2 will add a further 16 billion cubic meters per year of gas production to the approximately 9 billion cubic meters per year produced by Shah Deniz Stage 1.

The gas will be exported to Georgia, Turkey and European markets through expansion of the South Caucasus Pipeline and the construction of the Trans Anatolian Natural Gas Pipeline and the Trans Adriatic Pipeline.