Though Russo-Georgian relations are in tatters, Georgia has no choice but to remain dependent on Russia for natural gas.
Russia and Georgia — whose relationship is still shattered after the war between them in August — are to start energy negotiations in mid-December. Both sides are ready to play hardball, though Tbilisi has no option other than to remain dependent on its former Soviet master.
Georgia currently relies on Russian natural gas to fulfill approximately 60 percent of its domestic demand, with neighboring Azerbaijan fulfilling the other 40 percent. Russia relies on Georgia to transport natural gas to Armenia and pays Tbilisi 0.2 billion cubic meters (bcm) annually for that service (a fraction of Georgia’s annual consumption of 1.5 bcm). Georgia pays well below what Russia charges its European customers for its natural gas supplies, paying $260 per thousand cubic meters (tcm). It pays even less for Azerbaijani natural gas — approximately $180 per tcm — and receives 0.2 bcm in payment for transporting natural gas from Azerbaijan to Turkey.