Gazprom gambling

Gazprom, the Russian state-controlled natural gas supply holding, has offered to consider different methods of rehabilitating and reconstructing/developing the Georgian natural gas distribution system.

Deputy Chairman of Gazprom Valeri Golubev stated on April 1 that Russian natural gas enters Armenia through Georgia, but the Georgian gas transit system is old and unstable, thus creating problems for Armenian consumers. Therefore he suggested that to satisfy the increasing demand for natural gas from the Armenian side serious rehabilitation works to improve the Georgian gas transportation system are urgently needed.

Gazprom is concerned about the problems in the Georgian segment of the gas pipeline. However it is known that the rehabilitation of the Georgian gas distribution system is on the agenda of a Millennium Challenge project financed and monitored by the US. Millennium Challenge intends to allot USD 395.3 million for financing projects to rehabilitate the gas supply system, including the construction of underground natural gas storage facilities.

It should be noted that some time ago Gazprom attempted to buy the main gas transportation, supply and distribution network in Georgia. The Georgian Government, represented by Kakha Bendukidze, was not against this, but on the contrary was supportive. The sale would have been made if it had not been for the urgent intervention of US State Department representatives, who hastily recommended to the Georgian side that they should not sell the main gas distribution and supply system as this would have very seriously undermined Georgia’s energy security. In return the Americans took on the commitment of including gas distribution supply system rehabilitation in the Millennium Challenge programme.

In effect, therefore, Russia through Gazprom wants to rehabilitate Armenia’s supply network with American money.