Fresh questions about Tbilisi’s strategic direction and energy security appear in the frames of recently signed deals between Georgia and Azerbaijan.
Georgian Dream Prime Minister Irakli Kobakhidze and Azerbaijani President Ilham Aliyev signed the deals following a meeting in Baku held on May 18. It happened just a few weeks after Aliyev’s visit to Tbilisi and his meeting with Bidzina Ivanishvili, Georgia’s de facto ruler. They haven’t disclosed the full texts of the agreements, despite their political significance. As a result, the Georgian government is criticized for making decisions without sufficient transparency or regard for the country’s long-term energy independence.
As official statements report, the sides agreed to a 20-year inter-governmental framework governing electricity supply and transit, along with a 20-year extension of a 2003 gas-purchase agreement. According to the Georgian government, the purchase deal “guarantees the security of social gas supply.”
Also, the agreements include restoration of daily passenger rail service between Tbilisi and Baku after a six-year gap. The Georgian government also claimed that the new section of the Baku-Tbilisi-Kars (BTK) railway will become fully operational.
This deal will help Tbilisi stay relevant in trade discussions, while relations between Azerbaijan and Armenia improve. Another threat for Georgia is new transit routes like the Trump Route for International Peace and Prosperity (TRIPP) corridor.
Nevertheless, Tbilisi’s energy-supply vulnerability and the country’s growing dependency on Russia provoke concerns due to the lack of transparency and shifting energy trends. Georgia has relied on Azerbaijani gas less over the past year. Meanwhile, it has surged imports from Russia, despite a significantly higher price of Russian gas.
According to economist and former National Bank president Roman Gotsiridze, the recent gas-supply agreement contradicts Georgia’s national interest. It looks like Georgia has given up its share of transit capacity in the Baku-Tbilisi-Erzurum gas pipeline to Azerbaijan for the next 20 years. Meanwlile, only through the old, worn-out Soviet-era Gazakh-Saguramo pipeline will provide gas to Georgia.
Also, Gotsiridze warned that importing gas from Russia will be the only alternative, as increasing gas consumption will make additional supplies from Azerbaijan physically impossible. Some critics sees in the pattern the reflection of a calculated trade-off by Ivanishvili and his Georgian Dream government. Its first aim is securing for Georgia a role in trade routes connecting Europe and Asia. Another aim is trying to claw back leverage with Western partners alienated by the government’s authoritarian turn.
As Kobakhidze pointed, transit and geopolitics are the government’s priority, not energy security.
NH Logistics GEO has been offering IOR Importer of Record and EOR Exporter of Record services since 2001 and is a market leader in Georgia and Eurasia, supporting many clients with their import/export shipments.
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