Accessibility links

Breaking News

Georgia, Gazprom Agree to New Transit Terms

FILE - Supporters of the main opposition party wear Georgian national flags during a protest against buying gas from Russia's state-controlled Gazprom, in Tbilisi, Georgia, March 6, 2016.

Georgian government officials on Wednesday accepted new payment terms for transit of gas across the country by Russian-owned Gazprom.

Under the new deal, Georgia, which currently receives 10 percent of all Russian gas that crosses the country en route to Armenia, has agreed to monetize the arrangement by 2018. At that time, the Russian government will begin issuing payments in cash.

"The other option was to continue transit of gas illegally," Georgian Energy Minister Kakhi Kaladze said at a news conference in Tblisi. Because the commodity-based contract expired December 31, continuing to use gas flowing through the country without a formal agreement in place would constitute theft, he said.

After the latest two rounds of failed negotiations, in which Gazprom insisted on monetization of the gas transit fee — which was unacceptable for the Georgian side — Kaladze touted this new arrangement as "short term" and "optimal" for current Russian-Georgian relations.

Kaladze was quoted in local media outlets as saying the deal wouldn't increase Georgia's dependence on Russian energy carriers, and that "only the form of payment will be changed."

"Instead of payment with commodity ... we will move to monetization," which he described as compliant with "international practices."

Government critics who fear that buying gas from Gazprom makes Georgia dependent on Russia, however, were quick to dismiss that argument.

Protest in March

In March, demonstrators formed a nearly 7-kilometer (4-mile) human chain, stretching from the Russian Embassy to the government headquarters, in order to express their opposition to monetization of the deal.

The rally was organized by former President Mikheil Saakashvili's pro-Western United National Movement party, which accuses Moscow of using Gazprom in a bid to prevent Georgia from forging closer ties with the West.

Batu Kutelia, vice president of the Tblisi-based Atlantic Council of Georgia, said Kaladze's comments lacked clarity.

"It is unknown if this deal fits Georgia's foreign policy mandate, and we wonder if the Foreign Ministry was involved in the negotiation process or if the decision was made solely by the Ministry of Energy," he told VOA's Georgian service.

"We are not in a position to fully compromise and agree to Russia's demands," said Giorgi Oniani of Transparency International, an anti-corruption watchdog, referring to Georgia's current efforts to join NATO.

"It is very seldom when Georgia has leverage over Russia, [and] this was the time when Georgia could have had [it], as Russia is interested in continuation of the transit," Oniani said.

Russia and Georgia fought a brief war in August 2008 over the two Moscow-backed breakaway regions of Abkhazia and South Ossetia.

This report was produced in collaboration with VOA's Georgian service.