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Georgia to launch oil-shale auction

Energy ministry will offer six 25-year exploration licences in mid-November

Georgia will launch an oil shale licensing round in November. According to local media, the energy ministry will offer six 25-year oil-shale exploration licences in mid-November. Companies wanting to take part in the auction will have until 10 November to apply.

Oil shale is extracted from sedimentary rock, which contains kerogen – a mixture of organic chemical compounds – by mining. Oil shale needs more processing than conventional oil, increasing production costs. Heating oil shale to high temperatures releases a vapour that can be distilled to produce shale oil.

Georgia produces very little oil or gas domestically, but it provides a vital transit route for exports of Caspian oil and gas to European and Mediterranean markets.

If Georgia could develop oil shale on a commercial scale it could potentially reduce the state’s dependence on Russia for energy imports. Georgia, which has been exposed to gas price rises by Russia in the past, is working with Azerbaijan and Romania to build a new pipeline to carry Caspian gas to Europe – competing with Russia for market share.

The planned Azerbaijan-Georgia-Romania interconnector (AGRI) pipeline project would deliver between 2 billion and 8 billion cubic metres a year of Caspian gas to Romania. The plans include a pipeline to a gas liquefaction plant on Georgia’s Black Sea coast. Liquefied natural gas would be shipped across the Black Sea to a regasification terminal in Romania, then carried on to Europe through existing pipelines.

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