HomeMediaLatest NewsTurkey “fraternally” demanded discounts and deferrals from Gazprom

Turkey “fraternally” demanded discounts and deferrals from Gazprom

26 October 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting
Тип: Interviews

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, gave an interview to Svobodnaya Pressa about the prospects for creating an international gas hub in Turkey.

- Of course, we are in a disadvantageous position,” Alexey Belogoryev says,— Due to the collapse of gas exports to European countries, Turkey has remained for us the only major market in Europe, not only in the coming months, but most likely in the coming years. Ankara understands this very well, therefore its negotiating positions have strengthened.

At the same time, it has been a very obstinate consumer before, since it has many sources of imports, and can afford it. Turkey has large underutilized liquefied natural gas capacities, growing imports from Azerbaijan, and serious plans to increase its own gas production in the Black Sea from literally next year.

In the long term, an increase in Iranian pipeline gas supplies is very likely, Israeli gas supplies and even supplies from Iraqi Kurdistan may begin. That is, Turkey is a fairly diversified country in terms of sources of gas supplies, and this diversification is only increasing over the years. Therefore, it has been very difficult for Gazprom to compete in this market in recent years.

Will Gazprom have to agree to Ankara's terms?

— I think that Gazprom will definitely make some concessions, at least in terms of deferred payments, since the company's financial position allows it. As for discounts, this is a more complex issue. When talking about gas discounts, there are two approaches. Either this is a fixed discount to the current price, or a change in the pricing formula. In this case, it is not very clear what Turkey wants.

In my opinion, Turkey will eventually achieve its goals, since Gazprom's negotiating position is obviously weaker. Moreover, this state of affairs will remain for a long time.

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