Gas Market News

13 January 2017

Gazprom Export and Georgian party have agreed on transit terms

Gazprom Export and Georgian party have reached an agreement on terms of Russian gas transit to Armenia through Georgia. In particular the parties agreed on shifting to currency transactions when paying for gas transit services.

In accordance with the reached agreement, the Russian side guarantees paying for services of transiting Russian gas through the Georgian territory to Armenia in 2017-2018 in the volume of 2.0 — 2.2 bcm per year as well as supplying Georgia with natural gas on flexible terms at the price which is by $30 per 1000 cubic meters lower than in 2016.

„As a result of series of meetings and longstanding negotiations, together with our Georgian partners we have managed to find commercial conditions which are optimal for both sides, and to reach an agreement on the terms of gas transit”, — Director General of Gazprom Export LLC Elena Burmistrova said.
 

Background

Gas transit from Russia to Armenia is carried out via the territory of Georgia. Earlier the services of transiting gas via the territory of Georgia were paid in kind, by physical supplies equivalent to 10% of natural gas transported through Georgia to Georgian consumers
In the global gas trade the practice of paying for transit with commodity has not been used for many years already. The Russian side offered its Georgian partners to shift to cash transactions based on rates which are used in the EU countries.
 

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