Cross-border Infrastructure Projects

Baku -Tbilisi - Ceyhan Baku-Tbilisi-Ceyhan pipeline is one of the greatest achievements of the engineering endeavors, spanning three countries from the Caspian Sea to the Mediterranean coast. The length of it is 1,768 km Through Azerbaijan - 443km Through Georgia - 249km And 1,076 through Turkey to the Ceyhan Marine Terminal; The pipeline is buried along its entire length highest altitude - 2,800 meters. Capacity - 1 mln. barrels of oil a day One of the largest pipelines in the world Construction of BTC was completed in 2005; It became fully operational in the year of 2006;

Baku - Tbilisi - Ceyhan British Petroleum undertook work in 2009 to expand the capacity of the BTC pipeline to 1.2 million barrels per day. Construction of additional facilities providing environmental and technical security in the alpine Kodiana section of the pipeline began in 2006. The BTC pipeline facilities include eight pump stations; Two in Azerbaijan Two in Georgia Four in Turkey Creation of the first direct pipeline between the Caspian Sea and the Mediterranean, brought positive economic advantage to the region Set of feasibility studies had been carried out, to achieve: no net damage to protected ecological areas or archaeological sites no settlement of people and no disruption to the livelihoods of local populations; As a result of the route selection process, not a single person was required to move from their home facilities.

Gas Consumption in Georgia Gas Consumption Forecast million m3/y   2012 2013 2014 2015 2016 Total natural gas consumption in Georgia mlnm3 1,969 1,912 2,193 2,412 2,260 including: commercial 739 834 947 978 846 residential 529 574 654 764 870 thermal power plants 701 504 625 526 Total natural gas supply in Georgia Russian gas including transit fee 204 178 268 295 122 Azerbaijani state company SOCAR 993 1,038 1,211 1,359 1,321 South-Caucasus Pipeline 717 677 686 720 792 other 55 19 28 38 25 Gas Consumption Forecast million m3/y

Gas Supply Structure Host Government Agreement between the Government of Georgia and SCP Project Participants Option Gas - 5% of SCP annual transit volume. Option Gas share in Georgian market 9% in 2015. - Supplemental Gas Sales and Purchase Agreements- 500 million m3/y of Supplemental Gas each contract year (21.2%) Outcomes of Negotiations on New Transit Agreement Approved by Georgian Government Georgia will receive 10% out of transited gas (Russian gas transit to Armenia) as a transit fee for services. Duration of the agreement is 2 years. Guaranteed transit volumes are as follows: 2 bln.mc – 2017 and 2.2 bln.mc - 2018

South Caucasus Pipeline (SCP) The South Caucasus Pipeline has been designed to transport natural gas from the Shah-Deniz field along with the Caspian basin to Turkey and then Turkey to the European market, via Georgia The length on the Section of Azerbaijan and Georgia 691 km Georgian section 249 km In Georgia the SCP follows the route of the Baku-Tbilisi-Ceyhan Like the BTC pipeline it is buried underground The SCP construction was completed in 2006 first delivery was received in Georgia in the year of 2007 the provision of this gas, from Shah Deniz field in the Caspian Sea, remains an important element in Georgia’s Energy Security.

South Caucasus Pipeline (SCP) The South Caucasus Pipeline (SCP) is one of the key projects of the Southern Gas Corridor in Europe Implementation of such important projects will be extracted from central Asia and transported to Turkey and European markets via Georgia. Our involvement enhances the role of the transit country;

South Caucasus Pipeline SCPX Project - is a new pipeline across Azerbaijan; two new compressor stations in Georgia Increased annual gas volumes of throughput capacity from 8-9 (current capacity) to 25 BCM; At the border between Georgia and Turkey, the pipeline will link to TANAP and further downstream to TAP pipeline. SCPX Benefits to Georgia – additional capital expenditure of USD 2 billion; 400 million USD will be spent on local contractors over the life of the SCPX project; About 2,000 people employed Energy security All necessary public and private land rights in the territory of Georgia has been obtained and registered by the operator of the SCPX system from the Ministry of Economy of Georgia;

Developments in Energy Infrastructure Underground gas storage project – currently the government working on creating strategic reserves of imported natural gas Supply reliability Reduced problems related to the supply-demand misbalance Infrastructure standards are in line with Energy Community and Association Agreement The construction is expected to startin 2018 and be completed in 2021 TYNDP for Electricity and Gas infrastructure TYNDP for Gas infrastructure has been prepared 2017- 2026 -short-term 2017-2019; -medium-term till 2021 -long-term before and after 2026; The plan includes network development plans for internal, cross border and transit infrastructures TYNDP for Electricity may be presented to the Council of European Network of Transmission System Operators(ENTSO-E) for review and identification of the Projects of Common Interests.

Thank You for Attention Ministry of Energy of Georgia Anna Maisuradze Senior Specialist European Integration Division Department of International Relations E-Mail: A.maisuradze@energy.gov.ge Website: Www.energy.gov.ge Tel:(995 32)2357822 Tbilisi 0105,Georgia