RUSSIA - Jan. 10 - Georgia Gas Cut-Off 'Tied To Turkey Deal'.

The Financial Times reports a letter sent by United Energy Systems (UES) head Anatoly Chubais to deputy PM Victor Khristenko in Sept. 2000 saying Moscow's decision to cut off gas supplies to neighbouring Georgia this month came after high-level lobbying by UES as part of its efforts to win a lucrative export contract to Turkey. Chubais attacked the way gas was supplied to the US-based electricity group, AES. (AES runs part of Georgia's electricity network, and controls the transmission network through which UES would export to Turkey. The text of the letter provides an unusual insight into the highly political nature of negotiations for UES's export contracts, and illustrates the apparently close links between UES and Itera, the Florida-registered gas company that has benefited from tight links to Gazprom). Chubais said UES had "an absolute understanding" with Itera, which then cut off supplies to AES "based on the advice of the Security Council". He said "this carefully planned scheme", designed to help UES win its contract with Turkey, was then foiled when AES got gas from a rival company called Inneftegazstroi. (Following Chubais's letter, Moscow again cut off gas supplies to Georgia at the beginning of this month, forbidding Inneftegazstroi from purchasing gas from Russia's reserves, and triggering power shortages and weakening AES's position. Georgian gas supplies are again provided by Itera. UES confirmed on Jan. 9 that it was very close to concluding an important deal with Turkey for the export of electricity, but said it was "absurd" to suggest that it had applied pressure on Moscow to interfere in gas supplies to Georgia. In the letter to UES-headed notepaper, Chubais accused AES of "trying to monopolise the Trans-Caucasian market and prevent our access to the Turkish market". He says Inneftegazstroi contravenes Russian government policy "by helping the Americans to prevent Russia from penetrating into the Turkish market". Michael Scholey, vice-president of AES in Georgia, said Moscow could apply pressure on Georgia to force his company to yield the transit network to UES).