Energy Central Professional


Turkey discussing new gas contracts, volumes with Moscow, Baku amid record gas demand

Interfax Russia & CIS Energy Newswire  


    DUBAI. Sept 21 (Interfax) - Natural gas consumption in Turkey is expected to top 60 billion cubic meters in 2021, Deputy Turkish Energy Minister Alparslan Bayraktar told reporters on the sidelines of the Gastech conference.

    The official forecast for gas consumption in Turkey for 2021 published by the country's Energy Market Regulatory Board (EPDK) at the start of the year is 50.865 bcm. In 2020, the country used 47.968 bcm of gas, and in 7M 2021, consumption grew 14% to 31 bcm. According to BP's data book, the all-time highest gas consumption in Turkey was registered in 2017 at 51.6 bcm.

    "Electricity consumption has grown over the past few years. At the same time, renewable energy sources have begun to play a significant role, while gas consumption on the part of electricity has declined somewhat. This year, we see that gas consumption is growing. High gas prices are having an impact on energy supplies. Last year, we were able to receive more liquefied natural gas [15 bcm], because there were competitive prices; this year will be fairly hard, but we are holding talks with our current suppliers, such as Azerbaijan and Russia, on new contracts and volumes, because some of the contracts with Gazprom (MOEX: GAZP) expire at the end of this year. The negotiations are going well," Bayraktar said.

    As reported, part of the contracts for supplies of Russian gas to Turkey - deliveries via the so-called western route; now this is TurkStream - expires in 2021. This concerns 8 billion cubic meters of gas, 4 bcm of which state-owned company Botas accounts for, and the other 4 bcm of which is resold to private importers.

    Gas of Gazprom tied to prices of crude oil and petroleum products could be far cheaper for Turkey than gas from other suppliers. Azerbaijan is currently supplying half as much gas to Turkey as before. From April, the consortium for the Shah Deniz project suspended gas supplies to Turkey as part of Stage 1 of the field's development in connection with the contract's expiry, and a new contract has yet to be signed. Supplies of LNG to Turkey are falling from month to month.

    Bayraktar said hybrid pricing was being discussed in the contracts with Gazprom, which would not only be tied to oil or hub prices.

    He additionally said talks were under way on potential new contracts for LNG purchases, while with Russia, preference is given to pipeline gas supplies. "We have a huge amount of pipeline gas from Russia. This is our priority [compared to LNG]," Bayraktar said.

    He also said Turkey wanted to sign a contract with Gazprom on gas transit to Europe, "as quickly as possible."

    Bayraktar said gas consumption in the electricity sector was volatile, since sometimes demand was covered more through RES.

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