Itera turns off gas taps to Georgian districts, citing debt

Representatives of Russia's No.1 independent gas producer said six districts in the east of the South Caucasus nation owed the company more than $250,000.

"Gas supplies will only resume after the debts have been paid," Itera said, adding that the total debt of all Georgian importers of Itera's gas was $6 million.

In the spring, Itera International Energy filed a $6-million suit against the Georgian Energy Ministry, accusing it of failure to implement a 2003 agreement on restructuring and gradual repayment of gas debt for 1996-2002, signed during Eduard Shevardnadze's tenure as president.

The Georgian ministry has denied any debts, saying the previous government had signed the deal in violation of Georgian legislation. The country's total debt to Itera is $104 million, including $46 million owed by budget organizations and companies.

In November, Russia's International Commercial Arbitration Court postponed indefinitely hearings of a lawsuit filed by Itera against the Georgian Energy Ministry.

In August, Itera-Georgia stopped gas supplies to the Kakhetia district in eastern Georgia and Kvemo Kartly in the south.

In September, Itera agreed with local gas distributors to restructure their debt, and the companies promised to pay the Russian exporter about $350,000 until October 30.

Kremlin-backed Itera exports gas to 103 enterprises in Georgia, including to 38 gas distributing companies, and also to the Tskhinvali district in Georgia's breakaway South Ossetia. The company supplies 20 million cubic meters of gas every month.

After Russia's natural gas monopoly Gazprom said it would insist on a price of $235 per 1,000 cu m for the ex-Soviet nation in 2007 amid tense diplomatic relations, Georgia turned to Azerbaijan for additional gas supplies from its Caspian gas field, Shah-Deniz.

Georgian President Mikheil Saakashvili has traveled to Turkey to further negotiate extra gas supplies to his country by receiving a part of Turkey's quota for the gas pumped from Shah-Deniz via Georgia.

Turkey's energy minister agreed earlier in the month to transfer part of his country's quota of 3 billion cu m to Georgia and Azerbaijan. Georgia hopes to receive 800 million cu m of gas from this quota to avoid winter energy shortages. The country consumes about 2 billion cu m of gas a year. RIA Novosti