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Construction of new gas reservoir key to Georgia’s energy security

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Author:  Story by Nino Edilashvili

Georgia will have an underground gas reservoir of regional importance, which, according to experts, will insure the country against technical problems on its gas pipelines or political manipulations by the suppliers.

Millennium Challenge Georgia Fund (MCG) will finance the Rambol Oil & Gas, a Danish company with $ 3.5 million to carry out pre-construction design study. The plan is to open the reservoir with an estimated capacity of approximately 400 million cubic meters in Ninotsminda, southeast Georgia in 2013.

Georgia needs a total of 1.8 billion cubic meters of gas per year. Annual consumption of the population amounts to 350 million cubic meters; thermal power stations consume 700 million cubic meters; while the rest of 800 million cubic meters is the share of the commercial sector.

“This [Ninotsminda Gas Reservoir] will be able to supply the whole Georgia [with gas] for a full month and only the population and key enterprises for two months,” Temur Gochitashvili, an advisor to the general director of Georgian Oil and Gas Corporation (GOGC), a state-run body, told Georgia Today. Therefore, he noted, the initiative is vital for the country’s energy security.

Rambol won the international competition announced by MCG and signed the deal on Dec. 29, 2009. Under the agreement, Rambol is obliged to conduct technical, geological, environmental, economic, financial and legislative design study for the project and present the results in nine months.

“We look very much forward to this project in Georgia. The project is a very important step for us on gas projects in this region and in general,” Project Director Niels Ringe said on Jan. 22 at a meeting with Georgian government and experts.

GOGC will be responsible to supervise the Rumbol’s work and detect the shortfalls.

“Once our country has this reservoir, Georgia will become the most stable country in terms of energy security throughout Europe,” General Director of GOGC said at the meeting.

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Georgia says worst over for economy

Massive foreign aid helps, but some doubt government’s economic claims

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Author:  Story by Nana Mamagulishvili, IWPR

The Georgian government has declared that the financial crisis has passed, and that 2010 will see the economy returning to growth, though experts say its policies are harming rather than helping the country.

They can all agree that last year was a tough one for Georgia, and that the war with Russia in 2008 was a cruel blow to the nation. The government expects official figures to show the economy contracted by four per cent in 2009 but it is forecasting a revival with growth of two percent this year.

The combination of the war, the wave of refugees it caused, the global crisis, political tension, a halt in investment and problems with producing goods for export, all severely harmed the economy and the government was forced to slash its budget. However now, say officials, the worst is over.

“Georgia has begun to come out of the economic crisis. The crisis came to an end in the country at the start of the fourth quarter of last year, which confirms the positive economic indicators,” said Prime Minister Nikoloz Gilauri, in words echoed by other ministers.

“Against the backdrop of great difficulties, the Georgian economy stood firm and preserved macroeconomic stability. This is the most important thing, especially in the long term. This means we managed to preserve the foundations on which the economy must develop,” said Economy Minister Zurab Pololikashvili.

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