Gazprom has lost its advantage in Turkey

Photo: Gazprom TC
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Having started 2024 with a significant increase in supplies to Turkey, Gazprom lost its advantage at the end of spring. But according to the results of five months, the company's exports to the country still exceed the figures of last year. The weather played a cruel joke, because of which Turkey reduced gas imports. Having huge reserves and the ability to quickly increase gas supply, Gazprom has become a balancing supplier for the country.

In the first five months Gazprom exported 8.39 billion cubic meters of gas to Turkey. This is 100 million cubic meters more than in January-May 2023. Such data is published by the Turkish regulator EPDK.

Judging by his information, the company has lost the advantage it gained in January-March. If in the first three months the company significantly increased supplies to Turkey to 7.24 billion cubic meters of gas, then in April and May they fell below last year's figures — 413 million and 734 million cubic meters, respectively.

Reduced imports from Russia in the last two months of spring coincided with a decrease in all gas purchases by Turkey — by almost 3 billion cubic meters in five months, to 21.45 billion cubic meters. At the same time, deliveries, for example, from Azerbaijan increased by only 240 million cubic meters (up to 4.67 billion), and from Iran and the United States declined to 2.49 billion and 2.29 billion, respectively.

The development of its own large field in the Black Sea has not affected the flows yet either. In five months, it amounted to a little more than 500 million cubic meters.

The weather played a cruel joke with Russian gas supplies. The warm spring has led to the fact that gas consumption in Turkey has significantly decreased, and storage capacities are seriously limited. Gazprom For Turkey, it has become a balancing supplier, which has huge reserves and the ability to quickly increase and reduce supplies depending on demand.

As the EPDK points out, part of the Russian gas is purchased under long—term contracts, and part is purchased at a spot price.

Turkish Energy Minister Alparslan Bayraktar said in a July interview with Bloomberg that last summer and winter Turkey and Russia has agreed on special gas prices regardless of the usual price formula in the contract between Gazprom and Botas: "Depending on market conditions, consumption volumes, import volumes, sometimes the seller, sometimes the buyer may make different offers."

Russia and Turkey continue to create a gas hub for the sale of large volumes to Europe. Meanwhile, Gazprom's supplies through Ukraine to the EU countries are under threat. The transit contract ends in 2024. Brussels has announced plans to completely abandon Russian gas in 2027. However, its share is still quite high in EU imports - 15%.

In this situation, European officials suggested that Turkey and Azerbaijan export all Caspian gas to the European Union, including through Russia and Ukraine, and in return use more Russian fuel. Experts noted to EADaily that gas can be called differently, but it will still be Russian.

"Actually, the idea of a Turkish hub is about that. Gas is sold, a Turkish mixture is obtained, which then enters Europe. This is on paper, but physically everything is the same as it was before," said Alexey Grivach, Deputy director of the FNEB.
Permalink: eadaily.com/en/news/2024/07/31/gazprom-has-lost-its-advantage-in-turkey
Published on July 31st, 2024 10:36 AM