HomeMediaLatest NewsA return of Gazprom: experts say, it's all about the price

A return of Gazprom: experts say, it's all about the price

16 November 2020

Salikhov Marcel R. President, Principal Director on Economic Studies, Head of the Economic Department

Marcel Salikhov, President of the Institute commented to News.ru on the prospects for Russian gas export to the Turkish market.

In June, Turkey bought the minimum volume of gas in the past few years from Russia - only 157 million cubic meters, but then supplies began to increase, says Marcel Salikhov, Director of the Center for Economic Expertise of the Institute for Public Administration and Governance of the Higher School of Economics. According to the expert, the main reason is the change in the price environment for Russian pipeline gas and LNG imported from other countries.

Gazprom supplies gas under long-term contracts pegged to the oil price with a lag of 6-9 months. The fall in world oil prices began in March this year, and just in the autumn, due to this, prices in the contracts of the Russian company began to decline. On the other hand, the cost of LNG in recent months, on the contrary, has grown significantly. Prices at the Dutch TTF (Europe's largest gas hub - NEWS.ru) have tripled compared to June.

The cost of Russian gas for Turkey has not been disclosed, but one can try to compare European prices, the expert notes. In September, the average effective price for Russian pipeline gas exports to Europe was $ 123 per thousand cubic meters. At the same time, the cost of LNG on TTF was $ 135, which means that Russian gas was slightly cheaper. By analogy, it can be assumed that Gazprom's supplies for Turkey have become cheaper than LNG purchased on the spot market. The importers realized that it is now more profitable to take Russian gas, and therefore increased the volume of purchases, the economist explained.

Turkey cannot expect to be able to buy cheap LNG next year. What happened this summer with the prices of liquefied gas is a short-term situation, which Ankara took full advantage of. But now demand in Asian countries is recovering, they are increasing imports of LNG, and world prices for it have already increased. Therefore, Turkey will gradually increase purchases of Russian gas, - Marcel Salikhov said.

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