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    Caspian Overview: Getting Gas to Georgia



An overview of the main questions in the Caspian Sea.

by: Iran desk

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Top Stories, Weekly Overviews, Political, Caspian Focus, Azerbaijan, Georgia, Turkmenistan

Caspian Overview: Getting Gas to Georgia

As Azerbaijan started increasing gas export to Georgia, at the same time Baku requested Russian giant Gazprom to supply the country with 3-4bn m3/yr of natural gas.

Azerbaijan's state oil company (Socar) announced that it is in talks with Gazprom as more and more of its associated gas is needed for reinjection to maintain oil output at the Azeri-Chirag–Guneshli oilfields (ACG). Russian gas will go to domestic consumers as its own export commitments to Turkey and Georgia are rising. 

Last October Gazprom started exporting 6mn m³/d to Azerbaijan’s methanol producer AzMeCo, however imports stopped after 20 days as it was too expensive.

At the same time, Azerbaijan started increasing gas deliveries to Georgia. While Turkey has been receiving all contractual amounts delivered from Shah Deniz 1, which is around 6bn m³/yr. With its pipelines working at capacity it no longer has to choose Iranian gas over Azeri. It can now take both but as Iran's had higher take-or-pay penalties it took that in preference.

Azerbaijan promised to increase delivering further 50mn m3 of gas to Georgia for the balance of this winter, or about 1.5mn m³/d.

Coming to up/downstream projects, the Shah Deniz-2 is reportedly being developed successfully, while Turkish Tekfen won a tender on providing two compressor and four metering stations on Tanap, a rout which should transit 16bn m3/yr of gas from Shah Deniz-2 gas to Turkey and European borders.

Central Asia

Turkmenistan has also started development of an offshore gas block for first time in history domestically. Turkmenneft started drilling in North Goturdepe and Altyguyi fields. The offshore gas reserves of Turkmenistan in Caspian Sea are estimated at 6.5 trillion m3.

Turkmenistan also announced that investments by Dragon Oil in the offshore Cheleken Aria, consisting two oil and gas fields, have reached $5bn.

After stopping imports from Russia in early 2016, Turkmenistan accelerated operations to build a pipeline to export 33 bn m³/yr to Afghanistan, Pakistan and India by 2019, but it seems, the development of fourth branch of Central Asia-China gas pipeline is behind schedule, thanks to Turkmenistan.

On February 18, Kyrgyzstan blamed Turkmenistan, Tajikistan and Uzbekistan for delaying the building work. The Kyrgyz government said that the construction of Turkmenistan-Uzbekistan-Tajikistan-Kyrgyzstan-China gas pipeline was planned to start in 2016, but that its neighbours had not finished their internal processes.