SOCAR discovers Georgian regions

SOCAR Georgia Gas, a subsidiary of Azerbaijan's state oil company SOCAR, which has been successfully operating in Georgia for more than ten years, agreed to invest new funds in the development of the Georgian gas pipeline network. To this end, Mamuka Bakhtadze's government transferred a number of gas pipelines in several eastern and western regions of the country to SOCAR Georgia Gas. The total length of gas pipelines is 594,000 running meters.

The gas pipelines have been transferred to the Azerbaijani company for 21.3 million lari ($9.5 million) in direct sale, which means that there have been no other applicants and those wishing to work in the regions very complex terrain and "social climate".

The regions are as follows: Kaspi, Gardabani (east of the country), Akhmeta (the mountain region of northwestern Georgia), as well as Zugdidi, Ozurgeti, Oni and Zestaponi, which had never been supplied with gas before. In line with the terms of the transaction, the cost of the real estate purchased by the company in the amount of 21.3 million lari should be fully paid within 48 months, including 8.5 million lari - within 36 months.

Energy expert Giorgi Khukhashvili told Vestnik Kavkaza that SOCAR's ten-year activity in Georgia is "a classic example of socially responsible business": "The Azerbaijani company carries out many humanitarian and social projects. To a large extent, it is not profitable for it to gasify some areas and villages without necessary number of solvent population, but SOCAR invests in these regions, based on its long-term mutually beneficial strategy in Georgia," Giorgi Khukhashvili noted.

The Georgian government and SOCAR signed a long-term agreement on December 26, 2008, when Georgia was in a severe energy crisis due to a shortage of energy resources. According to the deal, 23 regional gas distributing companies and a number of gas companies and networks were transferred to SOCAR on the terms of its investment in Georgia’s gas infrastructure. Over the years of its activity, SOCAR has invested more than $1.5 billion in various projects in the Georgian regions. For comparison, the entire annual budget of Georgia is less than $4 billion.

In October 2012, SOCAR became the owner of Itera-Georgia, a 100% subsidiary of ITERA International Energy LLC, becoming almost the only supplier and distributor of natural gas in the country.

At present, Azerbaijan remains the only supplier of natural gas, oil and oil products to Georgia. Subsidiary companies of SOCAR are engaged in expanding and modernizing gas distribution systems in the country, developing a network of filling stations under the SOCAR brand, and own an oil terminal in the Georgian Black Sea port of Kulevi city, through which Azerbaijani oil and oil products are transshipped to global markets.

Last year SOCAR President Rovnag Abdullayev, Azerbaijani Ambassador to Georgia Azer Huseyn, Georgian Prime Minister Giorgi Kvirikashvili, Energy Minister Ilia Eloshvili and head of the Government of the Adjara Autonomous Republic Zurab Pataradze solemnly connected the one millionth client with natural gas. It is noteworthy that it was a resident of Adjara Mamuka Makharadze.

Thus, by the summer of 2018 SOCAR has already covered the whole of Georgia except for Tbilisi. Until recently, Kazakhstan's KazTransGaz was supplying natural gas to the capital. Recently, Tbilgaz was bought by the Georgian Industrial Group of former parliamentarian Davit Bezhuashvili. However,  successful work will require constructive cooperation with the Azerbaijani company, which has become not just the largest foreign investor, but also a guarantor of energy security, social stability and economic development of Georgia.