Home / Gas / Gas Storage Tank will Strengthen Georgia’s Regional Positions
gas storage

Gas Storage Tank will Strengthen Georgia’s Regional Positions

Expert in energy issues Zurab Garakanidze talks about Georgia’s perspectives from the gas storage tank construction and the importance of the project implementation, in general.

“We have already found due finances for constructing a gas storage tank, Georgian Energy Minister Kakha Kaladze noted. SOCAR is interested in participating in the gas storage tank construction,” he added.

Required funds have been mobilized from the oil and gas corporation, he said. “We have priority positions, because we plan to launch gas storage tank construction in 2016. If there are no complications, we are sure that in 2018-2019 the second phase of Shah-Deniz will be put into exploitation and we will be able to receive additional volumes and our country will have an advanced position

Georgia has multiply tried to organize gas storage tank construction works, but in vain. However, today the gas storage tank project seemingly will be implemented genuinely.

 Do we genuinely need the gas storage tank and is it a real solution to the current problems?

The gas storage tank construction is a relevant issue for many years, starting 1990s. In 1992 the then government of Georgia invited a German company that developed feasibility studies. This documentation may be efficient even today, because the documentation describes the place, where previously the Samgori deposit existed. Moreover, in 2009 the similar attempts were recorded in Ninotsminda and this is the third attempt.

Even more so, all countries around Georgia own gas storage tanks.

Turkey owns two good gas storage tanks with 1.5 billion capacities. Ukraine possesses 13 underground gas storage tanks, Russia has 26 ones, including 20 underground ones.

Our neighbor Armenia owns the Aboviani gas storage tank. Azerbiajan owns Karadaghi and Kalmaz gas storage tanks with total of 3.5 billion cubic meter capacity.

The fact is our country could not implement this plan so far. What is the main problem that hinders the gas storage tank construction?

The point is that the superior factors have always coincided with the gas storage tank construction issues. For example, in 2008 the allocated funds were spent without purpose. Today, the Government has taken a decision and SOCAR is ready to take part in the project implementation.   I believe that the country striving for energy safety must own two attributes – diversified supply and a gas storage tank. Based on the current economic and geopolitical developments in the region, Georgia should definitely construct such a gas storage tank.

Both current suppliers are state monopolists, not only gas supply monopolists, but also state monopolist companies, both SOCAR and GAZPROM. Therefore, Georgia has a critical need of having a gas storage tank for energy security.

Who should implement this expensive project?

The Asian Development Bank (ADB), the European Investment Bank (EIB) or maybe even a private structure. Georgian Oil and Gas Corporation (GOGC) has started negotiations on the issue. Consequently,

The financial issues are not expected to be problematic. According to expert estimations, the project is valued by about 250 million USD.

How will this gas storage tank assist Georgia in resolving the current problems?

We know that at this stage Turkey receives natural gas from Russia through two pipelines: Blue Stream and the so-called Trans-Balkan pipeline. When considering the issue of toughening gas supply sanctions, the Russian Federation officials do not rule out the possibility of full suspension of natural gas supply to Turkey. In this case, Georgia could make benefit from reasonable employment of additional gas volume in the gas pipeline. Discussing similar issues in live program may seem less attractive, but the country should have structures that would discuss similar geopolitical issues.

Do you mean that Georgia may use gas pipelines for not only domestic consumption, but also other purposes?

Certainly. In this period all gas pipelines are overloaded by natural gas and Georgia is able to satisfy the domestic consumption in winter period, while in summertime the country will be able to export natural gas from here abroad. For example, in 2006 gas pipeline explosion resulted in natural gas supply cessation from Russia. In that period we did not have a gas storage tank and our country could not provide any reaction. Therefore, these factors shook Tbilisi and the regions of Georgia. Analogically in 2009 when Russia stopped natural gas supply to Ukraine, the industry of Ukraine was not much affected from his disruption, unlike the Georgian experience, because Ukraine owns a great number of gas storage tanks. I would refer to the 2015 sample too.

Because of the ongoing repair works on our pipeline, Armenia could not receive natural gas for a month, but the Aboviani gas storage tank managed to fully satisfy the needs of Armenian consumers and industry.