During 1996-2003, Russian ITERA was a main gas supplier for Georgia and owner of its natural gas distribution companies. As of 2002, Eduard Shevardnadze’s administration sought to alienate ITERA from Georgia’s gas sector. In 2002, Russian Gazprom took over the natural gas sector from ITERA and the control over the main gas pipelines. The pro-western Georgian opposition did not welcome this due to its implications for the Shah Deniz project and the Russian monopoly in Georgia. Russia on the other hand was dissatisfied with the presence of Western energy companies in the region. Before 2008, the Russian gas price for Georgia was $235 per 1000 m3 (the most expensive price in CIS). In 2006, after deterioration of relations, the gas prices were gradually increased from $63 to $235 with Russia buying Turkmen gas at $100 and selling it to Georgia at $230.
Continue reading from European Centre for Energy & Resource Security (King’s College London): Georgia’s Endeavours for Alternative Gas Supply: Implications for the regional Energy Map