Plan to Deliver Iran's Gas to Georgia

Plan to Deliver Iran's Gas to Georgia Plan to Deliver Iran's Gas to Georgia

A plan to export natural gas to Georgia will be finalized by the end of summer, a senior gas official said on Tuesday, stressing that the Caucasian states are among big potential customers for the strategic commodity.

Alireza Kameli, managing director of the National Iranian Gas Export Company, told IRNA that plans call for obtaining the licenses to launch the plan. Moreover, negotiations are underway with some European companies to provide the equipment for the planned export venture.

"To supply gas from Iran to Georgia, export licenses should be obtained from Armenia," he said.

“Based on a short-term preliminary agreement, up to 14 million cubic meters per day of natural gas will be supplied to Georgia for use in its thermal power plants,” Kameli said,

If the pilot program is financially viable for both sides, mid and long-term contracts will be undertaken and details of the export route as well as price and volume will be discussed in technical meetings.

Kameli said the Nurduz compressor station in Iran's East Azarbaijan Province, which is used to transfer gas to Armenia, has a large capacity and can be used to supply gas to other countries in the region.

If the initiative becomes a reality, Georgia would be the third Caucasian state, after Armenia and Azerbaijan, to import Iranian gas.

  LNG Options

Preliminary talks between Tehran and Tbilisi started in January 2016 when Georgian Energy Minister Kakha Kaladze announced his country's interest in buying gas from Iran.

Calling it a win-win deal, Kaladze expressed optimism about the prospect of cooperation with Tehran.

Asked about the possibility of supplying Iran's gas to European markets via Georgia, Kameli ruled out gas exports through pipelines for the time being but said the export of liquefied natural gas is on the table.

Iran is the fourth biggest producer and the fourth largest consumer of natural gas in the world. It produced 173 billion cubic meters of gas in 2014, the most after the United States, Russia and neighboring Qatar.

Iran sits on the world's largest gas reserves, holding an estimated 34 trillion cubic meters of gas.

It currently exports natural gas via pipelines to three neighboring countries, namely Turkey, Armenia and Azerbaijan. Ankara receives more than 90% of Iran’s gas exports under a long-term contract, and Yerevan and Baku receive around 6% and 3% respectively under swap agreements.