Home / Economy / TANAP Project Increases Economic Development in Georgia
SOCAR Reduces Georgia's Dependence on Russian Gas

TANAP Project Increases Economic Development in Georgia

At the initial stages of production, TANAP will increase volumes of gas transported through the Southern Gas Corridor from 6 to 22 BCM per year, Georgia’s Prime Minister said in his interview with international energy journal Caspian Energy.

TANAP’s construction is starting this year. What are Georgia’s expectations from the Southern Gas Corridor project?

Construction works for TANAP are in progress. At the initial stages of production, TANAP will increase volumes of gas transported through the Southern Gas Corridor from 6 to 22 BCM per year. As a result, an additional 0.8 BCM of gas will be available on the domestic market. The Southern Gas Corridor will be further expanded with the aim of also transporting Turkmen gas. Once the planned projects and regional initiatives are fully operational, Georgia’s role as a reliable transit country will further increase, together with strengthened energy security and economic development.

In addition, this major project will increase economic development in Georgia. SGC Consortium is investing millions in Georgia to upgrade the infrastructure, which creates jobs and supports widespread industrial development.

Why has Georgia decided to revise the long-term gas relations with Azerbaijan today – for political or economic reasons?

Georgia does not seek an alternative long-term supplier of natural gas. The strategic energy partnership between Georgia and Azerbaijan started 20 years ago through successful implementation of oil and gas transportation projects like Baku-Tbilisi-Supsa (WREP), BTC (Baku-Tbilisi-Ceyhan) and BTE (Baku-Tbilisi-Erzerum).

Azerbaijan, through a number of contracts supplies 90% of the Georgian gas market. After the commissioning of Shah-Deniz phase 2, Georgia will get additional volumes of gas through long-term agreements signed with the Consortium.

Before this date, the contract signed with SOCAR on 4th of March, 2016 will provide an additional 500 mln of natural gas to be supplied to “social” sector (households and thermal generation) through the SCP (South Caucasus Pipeline) until 2030. The commercial sector is deregulated and commercial consumers have the option to choose their supplier based on commercial terms.

“Georgian Railway” will ensure that the Caucasus is connected with Europe and Scandinavia

How will the circular economy and the alternative energy sector develop in Georgia?

Beyond vast hydro resources, other alternative energy resources will be developed, but it should be noted that hydro power plant projects are more competitive than wind and solar energy.

Despite this, the first wind project, with a capacity of 20 MW, is currently under development and will have the potential to be expanded to up to 100 MW. Net metering regulation has been recently launched to provide incentives at the end-user level. A number of projects aimed at using biomass and geothermal resources are also being considered to provide heat to rural and off-grid settlements.