Georgia to get natural gas from Azerbaijan

Georgia was due to start receiving natural gas supplies from Azerbaijan on Wednesday as the small Caucasus mountain nation seeks to reduce its dependence on Russia's increasingly expensive energy deliveries, the Energy Ministry said.

Photo: Georgia to get natural gas from Azerbaijan

Under the agreement with Baku, Georgia will receive 90 million cubic meters of gas over 90 days at a price of US$120 (Ђ92) per 1,000 cubic meters.

Georgia is expected to need 1.8 billion cubic meters of gas in 2007 and has an agreement in place with Russia's OAO Gazprom natural gas monopoly to supply 1.46 billion cubic meters this year at a price of US$235 (Ђ180) per 1,000 cubic meters.

That is more than twice what it paid last year, and Tbilisi had long balked at the higher price, accusing Russia of "political blackmail" and of using its vast energy resources to punish the former Soviet republic's Western-leading policies.

In December, Gazprom had threatened to cut off supplies if the new price was not accepted.

As well as the 90-day Azeri contract, Georgia will see additional volumes arrive from Azerbaijan when gas starts to flow from Azerbaijan's Shah-Deniz field along a pipeline to Turkey from February.

Georgia will receive its own quota of 250 million cubic meters of gas per year at a price of US$64 (Ђ49) per 1,000 cubic meters, while Turkey has agreed to cede 800 million cubic meters of its 3 billion annual quota to Tbilisi at an undisclosed price, reports AP.

Russia's relations with its small Caucasus neighbor hit its lowest point in years when Georgia briefly detained four Russian military officers on spying charges last fall. Moscow retaliated with an economic and transport blockade and a crackdown on Georgian migrants.

Under President Mikhail Saakashvili, Georgia has become a stalwart U.S. ally., seeking membership in NATO and pushing for closer ties with the European Union.