GEORGIA IS A RELIABLE STRATEGIC PARTNER OF AZERBAIJAN, ZURAB GUMBERIDZE, AMBASSADOR EXTRAORDINARY AND PLENIPOTENTIARY OF GEORGIA TO AZERBAIJAN IS CONFIDENT

Caspian Energy: Mr. Ambassador how would you assess the current level of bilateral relations between Georgia and Azerbaijan and role of economic component in it?

Zurab Gumberidze: The thing is, we regard the bilateral relations in the sphere of both policy and economy. I think., as to our political relationship we always state the highest level of our co-operation and demonstrate absolute unity of our views on basic directions of developing of our states concerning the integration with the western structures, which currently determine the values of democracy and independent development of the states in this world. As strategic partners we attach great importance to our bilateral relations and naturally, economy is a significant component of these relations. Our states have managed to create and realise projects of world significance within a short period of time, such as the TRACECA, transportation of "early" oil along the Baku-Supsa pipeline, and the Baku-Tbilisi-Ceyhan pipeline and the Baku-Tbilisi-Erzurum gas-line are being successfully realised. Each of these projects, as it was already noted, are projects of world scale for their value and size and we can note proudly that their realisation within the shortest period is a great achievement both for our states and the countries and companies involved in them. The fact that the drawing of legal and contract base the projects of these level in some other countries takes considerably more time can serve as an example. Therefore, we can state in our case absolute unity of goals and objectives, which enabled us to speed up the realisation of the projects.

Side by side with this, I consider the realisation of our bilateral economical projects most important, but regrettably, we have got lots of defects and problems too. I think, the phase of economic resurrection both in Georgia and Azerbaijan, as well as the phase of economic integration are serious reserves for our further co-operation.

As an ambassador, I'd like to note especially the high level of strategic relations with Azerbaijan, and I am very pleased with the fact. And I think, Georgia is a reliable strategic partner for Azerbaijan. Undoubtedly, for Georgia the relations with her close neighbours are of paramount importance, as well as with the leading countries that take certain interest in the region and Georgia.

C.E.: Could you kindly tell us in brief about the outcome of the visit of an imposing Georgian delegation to the USA?

Z.G: The visit was of private character. The talks dealt with the problem that the financial structures and organisations got involved in the shortest possible time to the process of financing the Baku-Tbilisi-Ceyhan project. The visit of President Heydar Aliyev of Azerbaijan to the USA and the delegations of the three countries, Azerbaijan, Georgia and Turkey, have been the indicator of the common position of the three countries, the leadership of the three countries the about paramount importance of realising the project within the time ear-marked. Meeting were held almost with all largest American and British financial structures, such as the World Bank, International Financial Corporation, OPIC, ExImBank, other important donors, which in their turn confirmed both the political and financial backing of the project. We emphasised our desire to accelerate financial provision of the said projects taking into account all internal procedures.

C.E: Was the ecological problem raised during the visit ?

Z.G.: The problem of ecology was, of course, raised, the position of the states on the problem was again demonstrated. The three countries have already granted ecological sanctions for the realisation of the BTC and BTE projects. We approach the problem in an unbiased way. We cannot rule out here that some problems have been created artificially. But in realisation of the project all negative moments are taken into consideration in all territories. >All demands that can be unbiased have been assessed by our experts and appropriate alterations have been made in Environmental Impact Assessment report. The problem that sprung up because of the proximity ( a distance of 20 km) of the pipeline to the Borzhomi spa of world fame, underwent the discussion of scientists, experts, non-governmental organisations (NGO) of Georgia and the remarks were sent to bp where they were given consideration and taken into account. The ecological component, I must note, is an important factor in realisation of any project, especially when the deals with a region as important as Borzhomi, or any other ecologically vulnerable part. I am sure, for Azerbaijan as well as to any other country any area is important where the risk of oil blow-out exists.

C.E: How would you assess the rate of the two projects realisation?

Z.G.: The project itself is being realised rather successfully, we can only regret that the terms of realisation of the Shah Deniz gas project and the construction of the Baku-Tbilisi-Ceyhan gas-line project were delayed, which are in a certain extent of no less importance than the BTC project. But , as I have already noted, we are rather optimistic about further development of the gas project, as we have managed to create the necessary legal base for contracts in the shortest possible time and we'll finish within two years the construction of both the oil pipeline and the gas-line. Construction of the both pipelines is to be carried out simultaneously. And even taking into account the delay, the term of project realisation seems all the same very condensed. We have already gained an experience in building pipeline for the "early" oil of Baku-Supsa, which was built within a year. And we are sure that our investors and the operators, particularly, bp Company and her subcontractors will complete building the projects in the time fixed.

C.E.: How is the security of the routes is to be ensured?

Z. G.: You know, President of Georgia has issued a decree to assign special service of the governmental guards to ensure the safety of the pipelines, which are actively fulfilling the task of reliable safeguarding of the process of the pipeline construction. We are proud to note the fact of rather successful provision of the security of the early oil route under operation, though the efforts, about which the press reported, could have happened at any pipeline all over the world. In our case, if these efforts actually were, they have been stopped rather operatively, the work is to be organised in this direction in future as well. We are sure, in order to ensure the security the most up-to-date technical means, the means of warning and avoiding the oil spills, special sensor gauges that reveal the outer interference will be applied. In case of necessity, the forces of , say , defence ministry and internal troops will be mobilised. Here I'd like to note especially an important fact, the attitude of the population towards the pipelines. The population is one of the most keen part, I would say, persons in normal functioning of the pipelines. The position of the population here is of no less importance than of the special services, which have got to ensure the security of the export pipelines.

C.E.: Could you say if Georgia is currently developing the problem of construction of an oil refinery in the territory of Georgia for the Caspian oil?

Z. G.: There is an idea like that. The project seems very important for Georgia in order to supply the country with guaranteed quality of oil products. Having an oil refinery would not be bad under availability of pipelines and the possibility of purchasing crude.

Such a decision would be of great importance. At present a number of small oil refineries are functioning in the territory of Georgia. I don't think, they meet the demand of Georgia, and therefore, building another large oil refinery meeting the world standards of quality of the production could enable the country to export it. Besides, the quality of oil products is also of paramount importance as the ecological requirements are getting intensified all over the world. High level of refining means high prices, it also means the neighbours, too, should have similar ecological standards, that is the regional approach. Now we think about the possibility of building in future an oil refinery in Georgia, which would not only enable Georgia to export good quality oil products, but also provide high ecological purity of its use.

C.E.: Could you tell us who supplies gas to Georgia at present and on what terms?

Z.G: Basic gas suppliers to Georgia are ITERA and GazProm companies, which have partners in the territory of Georgia and which accordingly conduct the negotiations on supplies, prices, quality of the raw gas, sometimes together with GazProm. Accordingly, the Baku-Tbilisi-Erzurum gas-line project is of paramount importance for us for efficient and reliable supply of gas to Georgia. And accordingly, of more higher level of security from the point of Georgia's energy supplies. Here I would like again to deal with the problem of ecology. We often talk about the necessity of preserving the ecology, but at the same time we forget that under the shortage of energy bearers we cut out the forests for wood, which is also a serious wealth of Georgia. Realisation of the BTE gas-line

From the point of gas supplies to Georgia, I believe, will stabilise the gas market of Georgia and accordingly the prices of gas supplied to the population.

Thank you for the interview.