Georgia launches its first refinery to secure its energy supply

Georgia begins construction of its first oil refinery at Kulevi, with the aim of reducing its dependence on Russian imports and strengthening its energy autonomy.

Share:

Gain full professional access to energynews.pro from 4.90$/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90$/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 $/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99$/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 $/year from the second year.

In a strategic move to diversify its sources of supply, Georgia has given the go-ahead to Black Sea Petroleum to set up a new refinery at Kulevi, on the Black Sea coast.
This facility, the first of its kind in the country, represents a major step forward for the Georgian oil industry, traditionally dependent on imports, notably from Russia.
With an initial capacity of 1.121 million tonnes per year, the refinery will not only meet the needs of the domestic market, but also stabilize supplies in a context of geopolitical uncertainty.
The refinery’s capacity is set to grow to 2.921 million tonnes per year, although no precise timetable for this expansion has yet been set.
At the same time, the construction of a tank farm with an initial capacity of 89,000 m³, expandable to 440,200 m³, is also planned, thus reinforcing distribution and export infrastructures.

An unstable geopolitical context

The decision to build this refinery comes at a time when oil supplies, mainly from Russia, have become increasingly unpredictable.
Recent disruptions to Russian infrastructures, notably due to targeted attacks, have highlighted the fragility of current supply chains. Georgia, until now largely dependent on these imports, is taking steps to secure its access to petroleum products.
In 2023, Georgian crude oil production stood at 56,200 tonnes, with steady annual growth of 15-20%.
However, in the absence of local refining capacity, most of the crude oil produced was exported at less advantageous prices.
The commissioning of the Kulevi refinery will change this dynamic, enabling Georgia to process its oil locally and better meet domestic demand.

Export potential and regional implications

The new refinery at Kulevi will not be limited to meeting domestic needs.
Indeed, its strategic location on the Black Sea coast opens up export prospects to neighboring markets such as Armenia, which also relies on imports of mainly Russian petroleum products.
The development of the Georgian ports of Poti and Batumi, as well as the future port of Anaklia, will strengthen this export capacity, by facilitating the maritime transport of refined products.
Crude oil supplies could come from several sources, including Azerbaijan, Kazakhstan, Turkmenistan and potentially Iran.
This diversification of sources is crucial in the current geopolitical context, offering Georgia greater resilience in the face of potential supply chain disruptions.
With this project, Georgia is positioning itself not only to meet its own energy needs, but also to play a more influential role in the regional hydrocarbon market.
By reducing dependence on Russian imports and increasing local production capacity, the Kulevi refinery marks a key step in the evolution of Georgia’s energy sector.

The Abu Dhabi Fund for Development has granted AED752mn ($205mn) financing to the Gulf Interconnection Authority to connect the electricity grids of the United Arab Emirates and Saudi Arabia, enhancing regional energy exchange.
The European Union postpones the launch of negotiations on its 2040 climate target amid internal deadlocks and mounting geopolitical pressure.
Ormat Technologies has signed tolling agreements for two new energy storage facilities in Israel, further strengthening its diversification and resilience in the energy sector.
Repsol has approved the final investment decision for the Ecoplanta project in Spain. This innovative project, utilizing Enerkem's technology, aims to convert non-recyclable municipal waste into methanol, marking a step towards industrial decarbonization.
The French Energy Regulatory Commission (CRE) issues recommendations to reduce economic losses caused by negative electricity prices, a growing phenomenon in 2024 resulting from an oversupply of electricity compared to demand.
Under the weight of colossal debt, Northvolt seeks protection under the U.S. Chapter 11 law. The departure of CEO Peter Carlsson marks a critical turning point for the company, once a European flagship in the battery industry.
Despite pressure on refining margins, Africa is accelerating refinery projects to meet growing demand and enhance energy security, while facing competition from global giants.
A major agreement between Petrobras and Vale marks a significant advancement in the decarbonization efforts of Brazil's energy and mining sectors, with the supply of renewable content diesel intended for heavy vehicle fleets.
The French government unveils its strategy to increase offshore wind capacity, targeting 18 GW by 2035 and 45 GW by 2050, through an ambitious call for tenders covering all maritime fronts.
The continued increase in development costs of upstream oil projects is testing the economic viability of new oil production. A recent study by Rystad Energy reveals an increase in breakeven costs, while still remaining below current oil prices.
Avjet Holding Inc. was fined 200,000 dollars by the Quebec Court for violating the Canadian Environmental Protection Act following a spill of 4,900 liters of petroleum product in January 2023.
TotalEnergies, in partnership with APA Corporation, has confirmed a USD 10.5 billion investment to develop Block 58 off the coast of Suriname. The project aims to exploit the oil resources from the Sapakara and Krabdagu fields, with reserves estimated at over 750 million barrels. The fields, located 150 kilometers offshore, will be developed using a Floating Production Storage and Offloading (FPSO) unit capable of processing up to 220,000 barrels per day.
OPEC is revising its oil demand forecasts for 2024 and 2025 downwards, due to weak economic growth and increased supply from its competitors.
In Uganda, 21 activists were arrested in Kampala for protesting against the EACOP oil project, backed by international players, highlighting the economic and geopolitical tensions surrounding this initiative.
Masdar and TotalEnergies are collaborating to transform green hydrogen into methanol and sustainable aviation fuel (SAF) in Abu Dhabi, aiming to decarbonize the aviation and shipping sectors.
Zambia will import 200 MW of electricity from South Africa and Zimbabwe to compensate for severe power cuts caused by prolonged drought.
EDF and Generadora Metropolitana launch CEME 1, a 480 MW solar power plant in the Atacama desert, to supply 500,000 homes.
South Sudan is facing a severe economic crisis following the rupture of a pipeline crucial to its oil exports. This situation accentuates inflation and plunges the population into growing insecurity.
European Energy obtains approval for 500 MW of wind and solar projects in Romania, taking a key step towards their realization.

Log in to read this article

You'll also have access to a selection of our best content.