Azerbaijan, Georgia and Romania signed a deal Tuesday to create a transit corridor to ship natural gas from the Caspian Sea to Europe, lowering the continent's reliance on Russian supplies. The project will see the three countries participate in the construction of liquefied natural gas (LNG) terminals in Georgia and Romania, allowing gas to be shipped through pipelines from energy-rich Azerbaijan to Georgia, then by tankers across the Black Sea to Romania.
The deal was signed by the energy ministers of the three countries during visits by Georgian President Mikheil Saakashvili and Romanian President Traian Basescu to Azerbaijan's capital Baku, Azerbaijani state energy firm SOCAR said in a statement.
In a summit meeting shown on Georgian television, Azerbaijani President Ilham Aliyev said the project was "a basis for strengthening energy security and regional co-operation." Saakashvili described the deal as "a significant breakthrough in the sphere of energy security." Hungarian Prime Minister Viktor Orban, who attended the summit as well, said his country was also ready to participate in the project. SOCAR, the Georgian Oil and Gas Corporation and Romania's Romgaz will each hold a 33 percent stake in the venture, which is expected to cost two to four billion euros (2.6-5.1 billion dollars).
Called the Azerbaijan-Georgia-Romania Interconnector (AGRI), the project is expected to supply up to eight billion cubic metres of gas to Europe per year. An initial memorandum of understanding on the project was signed in Bucharest in April. The project is aimed at diversifying energy routes to Europe, which relies on Russia for a quarter of its gas supplies. The European Union has been seeking alternatives to Russian gas following a number of disputes that disrupted Russian supplies to some countries in eastern and central Europe.