Natural gas storage facility to be built

The Georgian Government has decided that natural gas storage facilities should be built at the Ninotsminda gas field, which is currently in the possession of the Kanargo Company. The Millennium Challenge Fund will announce in July a tender for selecting a company to carry out a feasibility study concerning this. USD 18 million will be allotted for the study.

The facility will be constructed over an empty oil well. Gas will be pumped into it and thus it will be stored. Of three possible options, Rustavi, Samgori and Ninotsminda, the last proved to be the best site for the facility as one here could contain 4-500 million cubic metres of natural gas, enough to satisfy the country’s needs for 2-3 months.

The project will take over two years to complete. The Ministry of Energy thinks that project works might take nine months and the construction itself two years. The estimated cost is around USD 117 million. There is a possibility that Azerbaijani company SOCAR will participate in this project.

Some independent analysts are challenging the state’s official optimism about this facility. Davit Eliashvili thinks the cost of the project will be more than USD 117 million, perhaps as much as USD 200 million, and that it will take 12-15 years to complete. He also thinks it will take another five years to pump the gas into the reservoir, purifying it will add to the project cost further and almost half of the extracted gas might be lost.

There are 630 gas storage facilities around the world. 3 are in the South Caucasus, one in Armenia near Yerevan and 2 in Azerbaijan. Russia has several gasholders, together containing 400 billion cubic metres of gas, 10 % of Russia’s annual consumption.