Gas Politics: Prez Sargsyan visiting Tbilisi amid Georgia’s talks with Gazprom

Armenian President Serzh Sargsyan is visiting neighboring Georgia today, October 30. The visit was announced only the day before, giving rise to assumptions that some transformations are being prepared in the region.

These views strengthened even more after the release of an official report on the visit that said that “new prospects for promoting the Armenian-Georgian agenda will be outlined.”

The new prospects, apparently, are being outlined in the gas sector. Georgia is conducting active negotiations with Russia’s gas giant Gazprom on the purchase of more natural gas. Currently, Georgia receives from Gazprom about 3 billion cubic meters of natural gas annually, 2 billion cubic meters are transited to Armenia and part of it is taken as a fee for the transit and another small part is used for commercial purposes. Georgia receives the bulk of its gas from Azerbaijan.

Many in Tbilisi do not understand why Georgia needs Russian gas if Azerbaijan can fully meet its demands. However, apparently, the initiative belongs to Russia, which wants through Georgia and Armenia to sell natural gas to Iran.

Iran has one of the largest gas reserves in the world, but, as Russian Energy Minister Alexander Novak explained – Russia and Iran agree on swap gas supplies. In other words, Iran buys Russian gas at the border with Armenia for its northern regions, and due to this in the south it sells its gas as Russian. Thus, Russia hopes to bring its gas to the Persian Gulf.

Economists estimate the benefits from such a project as minimal, however, in the political sense, Russia gains control of the Armenian-Georgian transit of Iranian gas and does not allow Europe to receive Iranian gas through the Armenian-Georgian transit.

This project was rather negatively perceived in Georgia, which may economically, however, benefit from it. However, the Georgian opposition is strongly against building relations with Gazprom, which is often called the “Russian occupation tool”.

President Sargsyan’s visit to Tbilisi, however, may be evidence that Russia has managed to convince Armenia and Georgia. In fact, the essence of the project is to block the transit of Iranian gas to Europe, which, apparently, will have to find other ways, again bypassing Armenia and Georgia. While there might be some economic benefits for Armenia from the Russian-Iranian project, politically Yerevan again risks to lose by becoming a partner of Russia in an anti-Western project.