Expert (Bulgaria): Turkey rejects Russian gas

Ankara prefers to import liquefied natural gas, which currently is cheaper than from Gazprom, and it outlines the sad fate of the pipeline “Turkish stream” with a value of 7 billion euros, according to The publication notes that this is happening against the background of the economic crisis and the cooling of relations between Turkey and Russia in connection with the conflict [Turkish armed forces] with the Russian military in Syria and the actions of Wagner’s mercenaries in Libya.

Delivery of Gazprom and the Turkish BOTAŞ independent private operators in March fell to 210 million cubic meters. For comparison, in the same month in 2019, the volume amounted to 1,418 billion cubic meters, and before the first quarter of 2018, the volume of imports of Russian gas amounted to an average of 8.8 billion cubic meters, or of 2.93 billion cubic meters a month.

Thus, Turkey, which once occupied the second place among the largest consumers of Gazprom, now found only in the top ten buys and nearly as much gas as Armenia (193 million cubic meters a month) and even lower than Lithuania (272 million cubic meters).

According Turkey replaces Russian gas to LPG. Last year Turkey increased its imports of liquefied natural gas by 13% to 9.1 million tons. The largest suppliers were Algeria (4.3 million tons), Qatar (1.8 million tons), Nigeria (1.8 million tonnes) and the United States. Russian supplies to the Turkish market have declined by 35 percent to 15 billion cubic meters in 2019 — the lowest level in 10 years. As a result, the gas pipelines Blue stream and “Turkish stream” with a total capacity of 35 billion cubic meters per year remained half empty. In March, the capacity of these two pipelines only worked 10% of their capacity.

The trend to increase the share of liquefied gas in Turkey continues this year. Four months 2020 to liquefied natural gas accounts for 44% of all deliveries, of which 40 per cent of liquefied petroleum gas from the United States. According to Turkish sources of Reuters, the country plans to increase the purchase of liquefied natural gas on the spot market. This was also the reason for the extension of the prevention of the gas pipeline “Blue stream”. “LPG is currently much cheaper than Russian pipeline, so Turkey’s conduct makes sense,” — said the head of the research company in the gas market Ristad energy Carlos Torres Diaz. According to him, Gazprom deliveries cost Turkey 6.5 dollars per million BTU (British thermal unit) to 1, 5-2 of the us dollar for liquefied gas.

BOTAŞ contract with Gazprom expires in 2021. Ankara is planning to seek price discounts from the Russian group. “Access to cheap LNG and falling demand signal that our suppliers pipelines that they must show flexibility,” said may 16, the Turkish Deputy Minister of energy Alparslan Bayraktar.

Gazprom ready to more serious deterioration of the situation with the Turkish supplies. “The decline for the second quarter will be even more”, — the source said to Reuters. According to him, the total reduction of Russian supplies to Europe in the first quarter to 19.2 percent. According to the Federal customs service, Germany has reduced their purchases to 45 per cent (2.67 billion cubic meters), and Austria 25 percent (820 million cubic meters).

Clouds are gathering over Gazprom. Just a few days ago Germany has decided that Nord Stream 2 should meet European requirements and to provide independent operators with 50% of the bandwidth of the future gas pipeline. Thus, even if the “Nord stream — 2” will be built despite U.S. sanctions, Gazprom will have to halve the scheduled delivery.

Turkish Daily Sabah newspaper commented that the fall in the price of liquefied natural gas undermines the role of the “Turkish stream” and export capacity of Russian pipelines in General. Prices on European spot markets continue to fall as a result of the restrictive measures because of a pandemic of mers, for example, last Friday the supply of Dutch gas exchange on Saturday was worth 53.7 USD per thousand cubic meters, and contracts on Sunday were valued at $ 52.

For comparison, Gazprom works at an estimated price of 133 dollars per thousand cubic meters, and reserves for its fall amount to 70 dollars.

“The future of liquefied natural gas. It is more mobile and more marketable product. It is interesting the global economy because it stimulates growth in several industries. The construction of facilities for liquefied natural gas regasification terminals. Special tankers, new investment and new skilled jobs. Pipeline gas does not give such impetus to the industry,” said an analyst at Finam’s Alexey Kalachev.