Inauguration of Trans-Anatolian pipeline and Georgia’s real perspectives for growing gas transit volumes has re-actualized the issue of building an underground gas store facility. Timeframes for putting the facility into exploitation were postponed three times over the past 3 years. The project was postponed because of protracted tenders. However, the challenges that the Georgian government may face after the facility inauguration may outline other factors frustrating the project. Several weeks ago, Georgian Prime Minister Giorgi Gakharia attended the official inauguration of Trans-Anatolian gas pipeline (TANAP) in Turkey. Indeed, TANAP does not cross the territory of Georgia, but it is the part of the so-called fourth gas supply route to Europe – the Southern Gas Corridor that, jointly with South Caucasian (crossing Georgia) and Trans-Adriatic pipelines, supplies Azerbaijani gas to Europe. The southern gas corridor is expected to launch full-scale operation in 2020 to transport 10 billion cubic meters of Azerbaijani natural gas to Italy. Additional gas volumes are being supplied to Turkey since 2018 as part of the second phase of Shah Deniz field. Thus, besides the transit volumes (830 million m3) from the first phase, in 2019 Georgia started receiving additional 50 million cubic meters of gas; this volume will grow to 100 million cubic meters in 2020 and the volume will hit 800 million cubic meters in 2023. Consequently, the consolidated transit gas supplies to Georgia (the so-called optional and additional gas volumes) will be 1.6 billion cubic meters. Even if Georgia’s gas consumption grows by 20% compared to 2018, transit volumes in 2023 will satisfy the domestic demand by about 60%. What do these boring figures mean for us? Indeed, these figures assure that the Southern Gas Corridor inauguration is of vital importance for Georgia’s energy security, because by 2023, Georgia will have signed preferential agreements on 60% of its domestic gas balance. At the same time, there is one challenge too – the point is that Georgia as a transit country is authorized to receive gas volumes at preferential rates but in equal portions. If the country cannot ensure this format, it will lose the right to receive these volumes, that is, the country will not be able to receive gas. Why do we need a gas storage facility? Deputy Economy Minister David Tvalabeishvili raised this question at the parliament committee meeting and answered this question himself: “We need this facility, because the gas volumes for Georgia from Shah Deniz (5% of the transported gas) cannot be supplied in equal proportions. Therefore, in 2023 gas supply volumes will increase and we do not know where to store additional gas volumes in summer period, while we will have gas supply deficit in winter period. Therefore, we need the facility to store about 300 million cubic meters of gas there”. Everything seems to be simple and clear, but the Deputy Economy Minister forgot to say that Georgia has been receiving gas on the same terms since 2007; This challenge exists since that period, but the country has not lost gas volumes despite its does not possess a gas storage facility. Georgia would not receive the due transit gas volumes so far if not the well-known agreement with Azerbaijani company SOCAR. The agreement called as an enslaving contract represents a virtual gas storage facility in its essence, because SOCAR sells Georgia’s own transit volumes in Georgia and assumes obligation to balance the winter-summer gas supply differences. Naturally, SOCAR does not provide this service free of charge. The mentioned agreement is valid through 2030. And the Deputy Economy Minister has not answered several key questions – which gas will Georgia store in the facility in 2023? Will the country negotiate the issue with SOCAR? What will the Georgian Authorities offer to Azerbaijani company in exchange? Will it buy off the 300 million cubic meters of gas from SOCAR for the storage facility and make this gas volume more expensive? Will Georgia transmit the facility operation right to SOCAR? During negotiations Georgian Government will have to take into consideration one important aspect – SOCAR provides commercial operation of the South Caucasian pipeline, from where Georgia is to receive transit volumes. This signifies SOCAR will be also commercial partner of Georgia in the issue of reception of the due transit gas volume. At a glance, nothing hinders gas storage facility construction in Georgia. The location has been already chosen – southern arch of Samgori; financial resources have been already attracted in the amount of 250 million EUR from the Reconstruction and Development Bank of Germany and European Investment Bank (EIB). However, Georgian Oil and Gas Corporation (GOGC) with rich experience of conducting international tenders has failed for 3 years to name the tender winner and maybe this frustration is related erground Gas Storage Facility Projeto the agreement with SOCAR. P.S. French company Geostock which has prepared feasibility studies for the gas storage facility, has provided only superficial research works above the ground. For the purpose of obtaining additional geological information and specifying technical parameters of the facility, the tender winner company will be obliged to carry out additional drilling works prior to commencing construction works. It is unknown what results these underground research works may reveal and whether these results will become the ground for suspending the gas storage facility construction for an uncertain period.