Turkish gas importers miss minimum summer quantities

Some Turkish gas importers failed to meet their minimum requirements for Russian imports during the summer, data from energy regulator EPDK show.

Turkish firms need to take at least 37.5pc of their annual contractual import volumes in April-September under their minimum summer quantity (MSQ) requirements in supply deals with Russia's state-controlled Gazprom.

State-run Turkish firm Botas holds two contracts for a combined 20bn m³/yr with Gazprom. Of this, 4bn m³/yr is delivered through the Western Line and 16bn m³/yr through the Blue Stream pipeline. But while Botas' Western Line receipts exceeded MSQ requirements, the firm's aggregate Russian imports were at a deficit, suggesting that it did not meet its summer obligations for Blue Stream imports.

Provided that the same summer requirement applies for Botas' 9.6bn m³/yr contract for Iranian and its 6.6bn m³/yr deal for Azeri supplies from Shah Deniz field's phase one, the firm may have missed the minimum volumes for Iranian gas but well exceeded those for Azeri deliveries.

Private importers

Seven Turkish private-sector firms have agreements for a combined 10bn m³/yr with Gazprom, all of which is delivered through the Western Line. EPDK data suggests that only one of these companies — Bati Hatti, which holds a supply deal for 1bn m³/yr with Gazprom — has met the MSQ requirements.

And given that supply that cannot be delivered during the summer because of maintenance is deducted from MSQs, other firms with aggregate imports in April-September close to 37.5pc of their annual volumes may have also met the requirements.

Aggregate private-sector Russian receipts in April-September were at 27pc of combined annual supply, with receipts by Bosphorus Gaz and Enerco — the two largest private-sector pipeline importers with 2.5bn m³/yr each — carrying the largest deficit to MSQ requirements.

Under the contracts, companies must pay a fee of 4pc of the average import price in April-September for all quantities under MSQs which they did not take.

Importers also carry take-or-pay obligations set at 80pc of their annual contractual quantities for contracts with Gazprom. Provided importers' offtake in a calendar year is lower than 80pc, firms need to pay for 75pc of supply not received under the take-or-pay obligations. They can then typically take the gas paid for — adding payments for the remaining 25pc of costs — within the following calendar year. In any event, companies would first need to reach minimum requirements under take-or-pay obligations for the following year before being able to take gas carried over from previous years.

Provided an importer remains below MSQ requirements as well as take-or-pay obligations, the penalty for staying below MSQs is cancelled and the payments transferred to those for take-or-pay gas. But if firms miss their MSQs while reaching their annual take-or-pay obligations, the penalty for summer requirements is not refundable.