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KazMunayGaz, Georgia talk over purchasing main pipelines

Oil&Gas Materials 3 July 2010 12:48 (UTC +04:00)

Azerbaijan, Baku, July 3 / corr Trend S.Suleymanov /

KazMunayGaz national company is in talks with Georgia on purchase of main pipelines, Kairgeldi Kabyldin, the chairman of the KazMunayGaz managing board, said this week.

"Indeed, we are considering transit via Georgia within the framework of establishing the Baku-Black Sea transport corridor. We are holding consultations with Georgia about terms of possible participation or purchase of any transport assets," Kabyldin said.

KazMunayGaz has asset in Georgia - this is the Batumi oil terminal.

"We have the Batumi oil terminal with the capacity of up to eight million tons per year. It means that we have outposts in the Black Sea, and there is logic in purchasing main pipelines," Kabyldin said.

Earlier reports said that Georgiaintends to withdraw main pipelines from a list of facilities, which are not allowed for privatization. Thus, the North-South main gas pipeline rehabilitated though US government's assistance can be allowed for privatization.

Transiting main gas pipelines in a privatization list is provided in a bill on state property, which consolidates four laws on privatization matters, and which was initiated at the parliament by Pavle Kublashvili, chairman of parliamentary juridical committee and his deputy Lasha Tordiya.

"The principle is very simple - private sector manages any enterprise rather the government. This fact and this is axiom for people who support free economic relations. Given that, none of enterprises should be exclusion in term of privatization," Kublashvili stressed.

The parliamentary chairman avoided to comment whether the authorities plan to sell main gas pipeline, and whether there exists a concrete buyer. Kublashvili said it is planned to adopt the law in July and it will enact immediately after publication.

Georgia intended to sell gas pipeline to Russian gas giant Gazprom even in 2005. However, it caused negative reply in Washington and the United States directly counteracted this intention of Georgia. The matter was closed until Georgia and the U.S. signed an agreement under the Millennium Challenges Program. Along with other projects, which totally envisaged approving $295.3 million in aid, this agreement envisaged rehabilitating main gas pipeline on condition that Georgia would not sell this facility.

"The government should not transfer or issue the gas pipeline and/or a control package of shares of the Georgian International Gas Corporation (or its subsidiary), and must not issue a laying right for gas pipeline before expiration of this contract, except exclusive cases, if the Millennium Challenges Foundation provides its written consent," the contract said.

According to the Millennium Challenges-Georgia Foundation, project on rehabilitation of gas pipelines ended in February 2010. Roughly $35 million has been spent to rehabilitate 22 sections of 221km - pipeline.

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