Invest in Georgia — Doing Business – 10 Reasons to Invest in Georgia – Strategic Geographic Location

Strategic Geographic Location

 

Located at the crossroads of Europe and Central Asia, Georgia’s three major oil and gas pipelines, Black Sea ports, well-developed railway systems, together with its airports are playing an increasingly important role, linking East & West.

 

  • Oil and Gas Pipelines: Georgia plays an important role as a strategic crossroad for hydrocarbon transit in the Caspian region. During the last ten years, $5 billion was invested by British Petroleum (BP) and its partners to develop the three major oil and gas pipelines that cross Georgia:
    • The Baku-Tbilisi-Ceyhan (BTC) pipeline, completed in 2005 at a total construction cost of nearly $4 billion, can transport up to a million barrels of oil a day from the Sangachal terminal in Azerbaijan to a newly constructed marine terminal in Ceyhan on the Turkish Mediterranean coast. One of the longest pipelines in the world, it generated total profit tax payments to the Georgian Government of $7.8 million in 2006. Estimated profit tax payments for 2007 will be around $25 million, rising to $50 million a year in the future
    • The South Caucasus gas Pipeline (SCP), completed in 2006, will carry natural gas from the Shah Deniz field in the Caspian Sea to customers in Georgia, Turkey and Azerbaijan. The gas supplied through SCP represents a source of future energy security and supply diversity for Georgia. SCP brings benefits of gas ‘in kind’ in lieu of tariff. Under current sales agreements, Georgia’s volumes will build up to 800 million cubic meters of gas at peak production.
    • The Western Route Export Pipeline (WREP), also known as the Baku-Supsa pipeline, has brought valuable transit fee revenues to the government of Georgia since it was completed in 1998.

 

  • Georgian Railway, one of the crucial links in Eurasian transit, serves as a short-cut between Europe and Central Asia, carrying 3.9 million passengers and 22.6 million tons of cargo in 2006. Georgian Railway now directly links to the railway systems of Armenia, Azerbaijan and Russia. The governments of Georgia, Turkey and Azerbaijan have agreed on a new Baku-Tbilisi-Kars railroad. The new 104,803 km railway will carry up to 15 tons annually by 2010-12.

 

  • The Black Sea ports of Poti and Batumi are key links in the TRACECA (Transportation Corridor – Europe, Caucasus, Asia) trade route.

Capacity of Ports of Poti and Batumi

 

  • Road Transport: Georgia has allocated 181.3 million GEL from 2006 state budget to improve the quality of its 20,229 km of public roads, which include 1,474 km of international, 3,326 km of state and 15,439 km of local roads. Another 459 million GEL has been allocated in 2007 state budget to improve road infrastructure.

 

  • Civil Aviation in Georgia took a big leap forward with the February 2007 opening of a new international terminal in Tbilisi, hailed as one of the world’s most comfortable and efficient terminals. Opening of the new terminal is expected to increase air traffic to Georgia, which is now served by four national and 14 foreign airlines, including Austrian Airlines, British Airways, Lufthansa, Germania Express, Air Baltic and Turkish Airlines. Direct air connections are available from Tbilisi to Istanbul, London, Munich, Odessa, Cologne, Riga, Tel Aviv, Kiev, Athens, Frankfurt, Paris, Amsterdam, Dubai, Vienna, etc.

 

  • Poti Port Free Economic Zone: Georgia is developing a free economic zone on the territory of Poti Port and surrounding area to allow investors to leverage Georgia’s strategic location and competitive trade regimes.

 

Volume of Total Transit (excluding Gas and Oil)

Source: Georgian Customs Department

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