Itera threatens to turn off gas to Georgia

Already reeling from a Kremlin threat to strike Chechen bases in thestrategic Pankisi Gorge, Georgian President Eduard Shevardnadze must nowengage Russia on another front: securing stable gas supplies.With winter fast approaching, the former Soviet republic has no choice butto reverse a decade-long strategy and increase its energy dependence onRussia, despite the heightened military tensions. The day of reckoning forTbilisi came in late June, when monopoly gas supplier Itera turned off thevalve and kept it off until its demands were met. Now Itera looks set toexpand its influence and take control of the country's gas-pipelinenetwork, via a joint venture with the government. And officials arehelpless to do anything but sign off on it, because they know what canhappen if they don't.While a lack of gas during the summer can be considered to be aninconvenience, during the winter, even in southern Georgia, it can belethal. Georgia has run up $90 million in debt to Itera since 1996, whenthe gas trader picked up where Russian gas monopoly Gazprom left off. BothGazprom and Turkmenistan stopped supplies to Georgia in the mid-1990sbecause they were not getting paid.During Soviet times, Georgia grew dependent on cheap energy. Marketrealities settled in after the fall of communism, and consumption ofnatural gas fell more than 75 percent over the next 10 years to about 1billion cubic meters, the St. Petersburg Times reported..

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