Friday, November 21, 2008

Russia to Build Pipeline Link to South Ossetia

Russia's recognition of de facto South Ossetia has brought new economic safeguards for the struggling republic. State-owned monopoliy, Gazprom, has extended its committment to building a new gas pipeline to Tskhinvali via North Ossetia. The geostrategic locations were chosen as the previous pipeline running from Tskhinvali to Gori was damaged in the Russian-Georgian War in August. The project, set to be completed by next year, will give vital energy to an economically feeble area with virtually no natural resources of its own. While Gazprom will supply gas to South Ossetia presumably for the long-haul, the central question of just how the republic will financially reciprocate the political favor remains to be seen. Meanwhile, Georgia has struck a five-year agreement with Azerbaijan over gas supplies. Georgian Energy Minister, Alexandre Khetaguri, said the plan will stipulate no increase in gas tariffs from Azeri state company, SOCAR.

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