Turkish pipeline gas imports jump in December

Turkey's gas pipeline receipts were at their highest in December for any month since at least the start of 2013.

Pipeline imports of 157.1mn m³/d were up from 118.2mn m³/d in December 2019, surpassing the previous record of 143mn m³/d in November.

The increase was driven by Russia, which accounted for almost half the total. Russian receipts rose year on year to 95.1mn m³/d from 60.8mn m³/d.

Russian imports increased sharply in the fourth quarter, more than making up for slow deliveries earlier in the year.

Private-sector importers lifted their 2020 Russian take to 4.14bn m³ — excluding spot imports by Engie's Turkish subsidiary of 710,000m³ — from just 1.32bn m³ a year earlier. That said, this was still only just over half their minimum obligation of 8bn m³.

In contrast, state-owned Botas reduced its Russian receipts to 12bn m³ in 2020 from 13.9bn m³ a year earlier — also short of its take-or-pay commitments for receipts through the Blue Stream and the Turkish Stream pipelines of around 16bn m³.

Botas and seven private-sector companies have long-term contracts with Russia's Gazprom for 14bn m³/yr through Turkish Stream, 8bn m³/yr of which expires this year. Half the 8bn m³/yr is held by Botas, while Enerco, Avrasya Gaz, Shell and Bosphorus Gaz have deals for the rest. It is not clear if these contracts will be renewed as negotiations with Gazprom are still in progress, but market participants said some of the volumes could be transferred to other companies.

Turkish Stream receipts have stayed high this quarter, according to market participants. Botas has an incentive to front-load long-term imports this year, as oil-indexed prices are expected to rise significantly later in 2021 following the rebound in oil prices. The company has a more diverse portfolio of suppliers than private-sector firms and can rely more on LNG imports later in the year if there is a price incentive.

Expected Russian import costs are $198.69/'000m³ for April-June, based on Argus' assessment of Turkey's long-term contract prices yesterday.

Azeri receipts also quickened in December from a year earlier. But deliveries may fall this year as a whole. The Azeri energy ministry has said Azerbaijan aims to deliver "at least" 8bn m³ to Turkey in 2021, well down from 11.5bn m³ for the whole of 2020, according to data from Turkish regulator EPDK.

The conservative 2021 projection suggests Botas could reduce its 6.6bn m³/yr contractual take from the first development phase of Shakh Deniz, with the contract scheduled to expire next month.

In contrast, Iranian deliveries fell in December from a year earlier, with flows to Turkey restricted late in the month.

Strong pipeline imports weighed on LNG receipts in December, which slipped to 44.9mn m³/d from 56.5mn m³/d a year earlier. But overall LNG and pipeline imports rose year on year.

Algerian and Nigerian LNG deliveries slowed, while the country received no cargoes from Egypt and Qatar, in contrast to a year earlier. This more than offset higher US LNG deliveries.

Turkey in December received its first Angolan cargo since 2018 — this arrived in the 6-12 December window requested in Botas' tender.

Domestic demand rises

Strong consumption, driven by the power sector and households, lifted Turkey's import demand in December.

Power-sector gas burn jumped to 50.1mn m³/d from 35.1mn m³/d a year earlier. And demand from households rose because of a cold end to the year. Consumption from organised industrial zones was also up.

These increases more than offset lower demand from the chemicals and petrochemicals industry and small businesses.

By Eleni Charisi