It is highly likely that Georgia will no longer be able to receive additional gas volumes from Azerbaijan under the old, preferential terms, and this will also affect local gas tariffs, energy expert Murman Margvelashvili told BMG.
As is known, the agreement with the Azerbaijan side on receiving additional gas volumes expires in 2026. Under this agreement, Georgia receives 500 million cubic meters of gas annually under preferential conditions.
According to Margvelashvili, the agreement was signed in previous years under terms that were extremely beneficial for Georgia, but under current circumstances it is impossible to maintain those conditions.
“The terms are very preferential, which was due to the prices that existed at the time the agreement was signed. Since then, global prices have doubled or more. Therefore, it is unlikely that Azerbaijan will supply us with commercial gas under the same conditions. Especially considering that it has agreements with many Balkan and Eastern European countries for gas supply and does not have surplus gas to distribute under some charitable approach.
Expecting friendly gestures in international relations is somewhat naive. This is a pragmatic relationship, and it is unlikely they will give us cheap gas if nothing is being offered in return.
He added that the 500 million cubic meters represent about one-sixth of the country’s consumption, and changes to these terms will have an impact on Georgia’s gas balance and on tariffs.
“We were receiving this volume at an extremely preferential price - around $70–75 per 1,000 cubic meters. These terms can't continue. The likely difference, I think, will be USD 150–200 million annually,” Margvelashvili said.
He also noted that in recent years the Georgian side has signed numerous different agreements with SOCAR and Azerbaijan, and it must be clarified whether any of these new agreements are connected to the main existing agreement. According to him, these non-transparent agreements must be disclosed.
“With regard to these tariffs, several agreements were signed with the Azerbaijan side that served short-term, politically motivated benefits in terms of tariff reductions. We can only hope that these agreements do not affect the main agreement we are discussing, and it is also questionable whether the terms of the transit agreement have been changed, because in reality we have no open information about what decisions were made in these contracts.
In short, a lot has become tangled. It is in the interests of the Georgian population, the country and the state to clarify what conditions exist now. It would be good if a real audit is conducted, even by state agencies themselves, and the situation is made clear. Why should a contract signed between the state and a state-owned company be non-transparent? On the contrary, it should be clear and transparent. This is also a security issue. The more open state contracts are, the safer we feel in relation to that company,” Margvelashvili told BMG.
