SOCAR: Export price of gas for Georgia higher than on domestic market

"There are discussions on social networks that allegedly the price of gas sold to the population in Azerbaijan is higher than the cost of gas sold to Georgia by SOCAR. It is alleged that tariffs for 1,000 cubic meters of natural gas in the domestic market are respectively 70.5, 118 and 147 dollars, while the price for gas exported to Georgia is only 92 dollars. According to other information disseminated in social networks, associated gas supplied to SOCAR free of charge by BP from Azeri-Chirag-Guneshli can satisfy 40% of demand in the country," Ibrahim Ahmadov, Deputy Head of the Public Relations and Event Organization Department of SOCAR, told Report that the cost of gas supplied to Georgia is currently much higher than the indicated price.

In his words, the wholesale price for exported gas is calculated according to a pre-agreed formula: "The costs of gas distribution networks are added to this price, and as a result, the tariff that is currently in force for the population of Georgia is added up - $180 per 1,000 cubic meters of gas. This is twice as high as that $92, which they write about in social networks. Wholesale and retail prices for commercial facilities in Georgia are higher and amount to $190 and $360 per 1,000 cubic meters, respectively. And the cost of exporting natural gas to other countries is even higher."

The SOCAR representative also noted that Azerkontrakt OJSC has been selling gas to consumers in the domestic market since this year, and this issue has nothing to do with SOCAR.

Ahmadov noted that last year BP transferred 2.2 billion cubic meters of associated gas to Azerbaijan: "Domestic gas consumption in Azerbaijan in 2020 amounted to 12 billion cubic meters. That is, associated gas from Azeri-Chirag-Guneshli is not 40% but 18% of total domestic consumption."

According to him, Azerkontrakt buys natural gas from SOCAR, BP, and other companies on various terms, sells it to electricity producers, gas distribution networks at a wholesale price, and the price of gas varies depending on its producer.