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Wednesday, 26 October 2016


Azerbaijan prefers Russia to Georgia?

18.05.2013  |  12:14

Azerbaijan prefers Russia to Georgia?. 29419.jpeg

Why Russia has stopped the transit of Azerbaijani oil, and how it can affect Georgia? President Saakashvili calls it a political decision, while experts speak about the economic unprofitability of this project both for Russia and Azerbaijan. Georgian experts say that after termination of the contract between Baku and Moscow all oil pipelines, pumping Azerbaijani oil, will pass through the territory of Georgia.


Georgia may be the only country through which Azerbaijan will transport the oil. Russia has refused from the transit of Caspian oil due to unprofitability. The Baku-Novorossiysk pipeline was used to pump only 2 million tons of "black gold" per year. Maintenance of the pipeline has become unprofitable.

Although officially the contract expires in late this year, it is unclear whether it will be extended. Today, the price for pumping a ton of oil is slightly more than $ 15. The rate has not changed since 1996, and Moscow is planning to revise it. And Baku is not ready to the new conditions, so it is unknown whether these arrangements will be extended.

Baku is pumping oil through Georgia by three routes - via the Baku-Ceyhan pipeline, delivering the "black gold" to the Mediterranean, via the Baku-Supsa pipeline to the Black Sea, as well as by rail to the Georgian ports of Poti and Batumi. In the future it is planned to transport Azerbaijani oil via the Baku-Akhalkalaki-Kars railway, but this route is ready no earlier than 2 years.

Despite the fact that most analysts say that the decision to suspend the transportation of oil through Russia was adopted on the basis of economic reasons, the President of Georgia Mikheil Saakashvili has a different version. Saakashvili says that today "Azerbaijan is the main goal for Russia." "If Azerbaijan collapses, then the whole region collapses," said Saakashvili during his visit to the U.S. "Today we should show solidarity towards Azerbaijan more than ever. This is in our strategic interest, so I call on the Georgian government to act in the interests of the country."

Obviously, Saakashvili implied the recent statements by Ivanishvili's government that Georgia should look for alternative energy suppliers, including Russia. Saakashvili then called this "actions directed against the interests of Georgia."

But the president is clearly rushing into the open door. The Georgian government has repeatedly stated it was not going to revise gas and oil contracts with Azerbaijan. And the possibility of Russian gas supplies, according to analysts, will depend on its price.

Georgian experts believe that Russia's decision can be regarded both as a political and economic.

- I think that Russia's decision to suspend the transportation of Azerbaijani oil is associated with the opening of the LNG terminal in Ureki, economic expert Emzar Jgerenaia said in an interview GeorgiaTimes. Now the whole Azerbaijani oil will be transported through Georgia. Technically, it is quite difficult to implement, since the load on both the pipeline and the railway increases, but in general it has a positive impact on Georgia.

- How promising is transportation of the oil through the Baku-Kars?

- Railway is yet to be built. And then, I do not think that it can compete with the pipeline.

- But if the capacity is not enough, is the construction of another pipeline possible?

- I do not rule that out. If Azerbaijan increases the volume of oil produced, only the Baku-Ceyhan pipeline cannot cope in this case.

But energy expert Natia Turnava does not see any political aspects in Russia's decision.

- Azerbaijan pumped a small amount of oil through the Baku-Novorossiysk - about 2 million tons a year, and it was not a strategic direction for Azerbaijan, Turnava said in an interview to GeorgiaTimes. "For Georgia, this is a positive thing if the volume of oil transported through Russia, though not a very large volume, goes through Georgia - by pipeline or by rail. Well, this decision will not bring negative results for Azerbaijan, since they have diversified energy supplies. I believe that in the future, the transportation of oil and gas through the territory of Georgia will increase.

- Don't you think this is a political decision?

- I can only sound the figures. Transportation via the Baku-Novorossiysk pipeline in Azerbaijan costs $ 15 per ton, and transportation via Baku-Supsa costs $ 3.5 per ton. I think that the function of Georgia as a transit country will only increase. And Georgia has always had good relations with Azerbaijan, so that the parties can agree. While the construction of additional pipelines is not supposed, everything will depend on Azerbaijan's plans.


Michael Vardzelashvili


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