Turkey takes less LNG in July

Turkey's LNG receipts fell on the year in July for the first time since February.

LNG deliveries fell to 16.4mn m³/d of pipeline equivalent from 18.5mn m³/d in July 2019, having risen on the year for each month since February.

A rebound in pipeline imports from earlier in the summer pared Turkey's LNG receipts, after LNG had pushed pipeline gas out of the country's supply mix earlier in the year. LNG made up a 16.3pc share of Turkey's aggregate imports in July. LNG receipts had outpaced pipeline gas for the first time in March, and again in May.

Algerian LNG receipts slumped on the year in July, while no deliveries at all were reported from Qatar and the US. This was only partly offset by some LNG arriving from Nigeria and France, with no cargoes delivered from these destinations in July 2019.

A drop in oil-indexed import costs in the third quarter following the slump in crude prices in late winter-early summer, along with higher LNG prices and the need to meet take-or-pay obligations, provided an incentive for state-owned Botas to increase its pipeline take.

Turkey's pipeline imports fell on the year, but not by as much as in previous months, supported by higher Azeri and Iranian receipts (see imports by country table).

Deliveries from Iran resumed on 1 July after an alleged attack on the export pipeline suspended flows from 31 March.

Azerbaijan remained Turkey's largest supplier in July, after surpassing Russia in March. Higher exports to Greece may have further supported Azeri imports, as Botas sells on some of its Azeri take from the first phase of Shakh Deniz to Greek state-owned Depa under a 750mn m³/yr contract that expires next year.

And Russian receipts rebounded in July, after falling sharply on the year in June. They climbed to 27.2mn m³/d from 5.2mn m³/d in June, although this was still well down from the 38mn m³/d a year earlier. The year-on-year decrease was again driven by Botas, while private-sector receipts edged higher (see imports by company table).

And scheduled maintenance on the Turkish Stream pipeline pared the country's Russian take on 27 July-10 August.

Russian receipts have been particularly low since March, as measures to contain the Covid-19 pandemic cut into Turkey's demand and higher LNG and Azeri receipts left little scope for brisk Russian imports.

Weak Russian receipts in the first half of the year may have increased the need for Botas to ramp up its take to meet minimum take-or-pay obligations in the second half.

And lower prices this quarter may support further strong Russian receipts. The price for Russian supply is about $174.39/'000m³ for the fourth quarter, below the $188.62/'000m³ for the third quarter, based on Argus' assessment of Turkey's long-term contract prices.

Consumption slips

Turkey's domestic consumption edged down on the year because of lower gas demand from the industrial sector.

Overall consumption inched down to 91.2mn m³/d from 91.5mn m³/d in July 2019.

Demand from the organised industrial zones, chemical and petrochemical industries and oil refineries were all down on the year.

This was partly offset by an uptick in power-sector gas burn. It climbed to 36.1mn m³/d from 33.5mn m³/d, driven by lower regulated tariffs for utilities from 1 July and strong overall power demand. Residential demand was also up on the year.

By Eleni Charisi