Gazprom in talks with Ankara over supplying gas to Europe

Gazprom in talks with Ankara over supplying gas to Europe

Gazprom in talks with Ankara over supplying gas to Europe

Russian energy giant Gazprom and its Turkish partners are currently in talks on how the TurkStream pipeline can be used for deliveries to the European markets, said Elena Burmistrova, the chief executive of the Russian holding’s export arm Gazprom Export.

“We are now in talks on the issue with our Turkish colleagues,” she said at a conference with investment banks when asked how the pipeline will be used for European deliveries, Russian news agency TASS reported yesterday.

Earlier, Burmistrova said that Gazprom might consider delivering some of TurkStream’s gas further to Europe on the condition that the demand for gas in the country continues to decline, according to the report.

However, they continue to be optimistic about Turkey’s natural gas consumption, she added.

Commercial deliveries via the TurkStream pipeline commenced on Jan. 1. It consists of two 930-kilometer offshore lines stretching from Russia to Turkey across the Black Sea, and two separate onshore lines.

Half of the pipeline’s capacity of 31.5 billion cubic meters (bcm) is allocated for Turkey’s domestic market, while the other half is supposed to carry Russian natural gas to the European countries through Bulgaria.

In June, a Hungarian firm announced it would join the TurkStream project with a 10-year development plan that includes the construction of a new Serbian-Hungarian gas interconnector, with a capacity of 6 bcm annually.
Gas purchases in Turkey have declined significantly since 2019 for several internal reasons, including excessive supplies of liquefied natural gas (LNG).

Ankara imported 45.3 bcm of natural gas last year, paying approximately $12 billion to pipeline exporters Russia, Azerbaijan and Iran, as well as LNG suppliers including Qatar, Nigeria, Algeria and the United States.

Turkey has set a target of increasing the share of LNG, which is generally cheaper, in its natural gas mix to around 33 percent in 2020 from 28 percent in 2019, according to the Natural Resources and Energy Ministry.

In recent years, Ankara has expanded its LNG and Floating Storage Regasification Unit (FSRU) terminal infrastructure, gaining the capability of meeting over 40 percent of its natural gas needs by LNG imports. The government is planning to open its third FSRU in Saros Bay, north of the Gallipoli Peninsula in northwestern Turkey, in 2021.

Meanwhile, Turkey’s largest-ever natural gas reserve discovery at Tuna-1 well in the Black Sea this summer has been revised up to 405 bcm, which is sufficient to cater to the gas needs of the country for up to eight years.

(HH) Gazprom sees moderate rise in exports

Gazprom forecasts a moderate year on year rise in European gas exports to be around 183 bcm in 2021, according to Famil Sadygov, the deputy chairperson of Gazprom.

Sadygov told Gazprom magazine that the company has calculated a moderate increase in gas exports to the European market for its 2021 budget.

The company is expecting to finish this year with 170 bcm of gas exports to Europe, down from 199 bcm in 2019.

Sadygov also said that the average price of gas supplies to Europe was set at $170 per 1,000 cubic meters in the 2021 budget, with a rise of $44, or 35 percent, compared to this year’s budget.

Gazprom’s natural gas export revenue fell by 51 percent to $11.3 billion in the first half of this year compared with the same period in 2019.