HomeMediaLatest NewsThe Turkish gas swing: a market where everything is very "subtle"

The Turkish gas swing: a market where everything is very "subtle"

22 September 2022

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department

Alexey Gromov, Principal Director on Energy Studies of the Institute for Energy and Finance, commented to the Oil and Capital Internet portal on the possible prospects for strengthening Russian-Turkish gas cooperation.

In light of the almost complete shutdown of the Nord Stream, a decrease in pumping volumes through the Ukrainian GTS, the cessation of Russian gas exports via Yamal Europe and the idle Nord Stream 2, Turkey is becoming an increasingly important gas transit country. Moreover, both for the EU and for the Russian Federation. If we add to this the fact of an increase in the volume of pumping through the Turkish Stream in 2021 (15.98 billion cubic meters - the highest figure since commissioning), then the importance of Ankara increases even more.

“The Turkish Stream pipeline consists of two lines - one for consumption inside Turkey, and the other for southern Europe, the so-called Balkan Stream. Even if there is a further escalation between the Russian Federation and the EU, gas transportation for Ankara will not suffer at all. Unless, of course, the latter decides to join the sanctions of the West, what is unlikely,” Alexey Gromov shared his opinion.

Another thing, the expert believes, is how reliable the Turkish market itself is. The events of recent years have shown that as soon as a favorable situation arises on the market, Ankara quickly switches to LNG, since it has terminals for this. Turkey's total regasification capacity is approximately 45-50 billion cubic meters per year, i.e., almost the country's annual consumption.

“If we talk about the current moment and the next year, then everyone expects great tension on the world gas market and high prices, therefore, Ankara is interested in Russian pipeline gas, especially under long-term contracts. Yes, Turkey used the European pricing model when concluding agreements with Gazprom on supplies through Turkish Stream and now pays more for gas than in the case of hydrocarbons from the Blue Stream pipeline. However, it is possible that the Russian holding will reconsider the conditions for pricing Turkish Stream. Still, Gazprom did it in relation to European buyers, however, in the opposite direction (they just demanded to change pricing in favor of spot transactions). Turkey, in conditions of high market volatility, needs a reliable supplier, and the Russian Federation - a reliable buyer,” Alexey Gromov believes.

Gromov Alexey I. Principal Director on Energy Studies, Head of the Energy Department
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