Georgia to Sell Armenia Section of Gas Pipeline

The Georgia-Armenia pipeline

TBILISI (RFE/RL)—The government of Georgia will likely sell to foreign investors a minority stake in the Georgian section of a pipeline supplying Russian natural gas to Armenia, according to a senior official in Tbilisi.

The Georgian online news agency quoted Energy Minister Aleksandr Khetaguri as saying late on Wednesday that up to 25 percent of shares in the pipeline could be floated soon on stock exchanges in New York, London and Warsaw.

“We have repeatedly stated that we intend to place minority stakes in those stock exchanges,” Khetaguri said.

“We have hired investment companies to go through all procedures, obtain appropriate recommendations and begin the process of share registration in order to be able to float approximately 25 percent of minority shares in [state-run] companies,” he added.

The Georgian parliament paved the way for the sale of the so-called North-South pipeline last year when it removed the facility of from a list of strategic state assets not subject to privatization.

The move raised fears in Yerevan that Azerbaijan’s state oil company, which manages Georgia’s domestic gas distribution network, could acquire it to block the vital gas deliveries to Armenia. Some senior Azerbaijani officials expressed an interest in such a takeover.

The Georgian government has insisted since then that it is only considering selling a minority stake.

“The government of Georgia is not going to sell a controlling stake in the pipeline,” Prime Minister Nika Gilauri said in Yerevan last February. “There are strategic facilities that will continue to be managed by the government of Georgia in the future.”

Armenian officials have similarly expressed confidence that the authorities in Tbilisi will retain control of the trunk pipeline that currently caters only to Armenia.

Despite starting to import gas from neighboring Iran in May 2009, Armenia remains heavily reliant on Russian gas. Also, more than 80 percent of its gas distribution network is owned by Russia’s Gazprom energy conglomerate.


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  1. Garen Yegparian said:

    It’s time to get our rich folk activated and round up the cash it would take to buy what the Georgian government is puting on the market.

    It’s only a matter of time before Georgia wants/needs more cash and sets out to sell more of an ownership stake than it’s currently putting on the market. This could become very dangerous for Armenia.

    Wouldn’t it be great to have all that be in Armenian hands?

    Heck, if the cash comes from there, it might even give the Diaspora leverage to get the RoA government to behave!

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