Gazprom cuts supply to some Turkish private importers

Russia's state-owned Gazprom yesterday cut gas deliveries to all Turkish private-sector importers except Bosphorus Gaz and Shell's Turkish subsidiary because of arbitration-related payments, market participants said.

Gazprom said in its most recent financial prospectus published in late June that it is currently part of proceedings involving Akfel Gaz, Kibar Enerji and Enerco Enerji. None of the firms were available for comment.

A Swedish court in June dismissed Akfel's appeal against a Stockholm arbitration ruling on a price revision in its long-term Russian gas contract, while Enerco's appeal is listed for 7-10 September. No hearing dates have been agreed so far for Kibar, Avrasya and Bati Hatti's appeals.

Akfel Gaz, Bosphorus Gaz, Kibar Enerji and Shell Enerji imported a combined 200.4mn m³ from Russia in April, with Botas receiving the rest of total Russian receipts of 2.51bn m³, data from regulator EPDK show.

Avrasya Gaz last imported Russian gas in March, while Bati Hatti and Enerco have not received any Russian gas since January 2019 and December 2018, respectively.

Seven private companies and Botas have long-term contracts with Gazprom for a total of 14bn m³/yr through the Turkish Stream line, of which 8bn m³/yr will expire by the end of this year. Negotiations are still ongoing with no outcome so far, market participants said.

Private-sector receipts have been below combined take-or-pay obligations of 11.2bn m³/yr in recent years. They were 4.14bn m³ last year, excluding a minimal amount of spot supply.

Only Bosphorus Gaz and Shell Enerji exceeded their take-or-pay obligations last year. The former received 2.29bn m³ in 2020 out of its 2.5bn m³/yr long-term contract with Gazprom, while the latter imported 213mn m³ under its 250mn m³/yr deal.

Botas wants to buy gas from private sector

Botas at the beginning of this week requested offers from private-sector companies for gas supply until the end of the year.

But Gazprom cutting deliveries to some private-sector companies would leave the private sector with less gas available for sale.

Offers were expected to be slightly above Russian import costs, market participants said.

Botas had imported 4bn m³ by mid-June — the full annual amount under its contract for deliveries through the line — and is now taking make-up gas through the Turkish Stream line, some market participants said.

The slowdown in Russian imports has coincided with limited Iranian receipts over maintenance, slower Azeri take since mid-April following the expiration of Botas' 6.6bn m³/yr contract for gas from the Shakh Deniz 1 and weak LNG deliveries.

And less gas imported by the private sector comes at a time of strong anticipated demand. Market participants expect high gas demand from the power sector to continue until the end of the year, thanks to lower hydroelectric reserves and high overall power demand.

To offset this, Botas has launched an LNG tender for 15 cargoes for August-December. Botas' supply share to utilities has increased since June.

And Turkish companies may be able to take some additional Azeri supply, with the Turkish regulator offering spot import capacity at Azeri entry points for August only and August-December on 28 July.

Import capacity of 2.93mn m³/d will also be offered for August at Malkoclar on the Turkish-Bulgarian border.

By Eleni Charisi