Page 13 - Euroil Week 28 2020

EurOil PIPELINES & TRANSPORT EurOil
Gazprom sells record ESP volumes in June
RUSSIA
Gazprom is trying to offset lower sales under long-term contracts.
RUSSIA’S Gazprom sold a record volume of gas at its electronic sales platform (ESP) in June, as it looks to o set a sharp decline in sales under long-term contracts this year.
Some 4.912bn cubic metres of gas was sold to European customers on the exchange during the month. In May, only 2.6 bcm was sold, versus 2.45 bcm in April.
Gazprom has been selling aggressively on the exchange, as supplies under its oil-indexed contracts have plunged as a result of coronavirus (COVID-19) lockdowns and users switching to cheaper LNG.
e Russian rm also o ered new pricing and delivery terms in June, signing deals for supplies over the next gas year commencing October 1, 2020, priced to a month-ahead price index of the Netherland’s TTF gas hub. e volume sold under these contracts exceeded 1 bcm, Gazprom said.
“ e result of sales with the use of the new instrument proved the market demand for it,” Gazprom Export’s director-general Elena Burmistrova said in a statement. “Even in the current turbulent conditions the ESP keeps growing, o ering new attractive products to its customers.”
ESP sales have fallen in July, averaging just
165mn cubic metres per day as of July 9, com- pared with an average of 245 mcm in June. All of these sales were for longer-term delivery, with no recorded within-day, day-ahead or bal- ance-of-month sales having taken place since May 21. Some 62.6 mcm was gas was sold for August delivery in July 1-9 and 24.2 mcm for September. Meanwhile, 287.8 mcm was sold for fourth-quarter delivery, and 451.5 mcm for win- ter 2020-2021.
Gazprom has seen a greater decline in gas sales in Europe than any other major supplier to the continent. It has lost considerable ground in Turkey in particular, which was previously its biggest gas buyer a er Germany. e country has been cutting back on Russian gas in favour of cheaper LNG imports.
As a result of this decline, Gazprom’s Blue Stream gas pipeline to Turkey, due to resume operations a er maintenance in May, remains idle, Reuters reported on July 9. There is no agreed date for its restart, sources told the news agency.
Gazprom is able to fully supply its Turkish customers using only the TurkStream, whose rst and only operational string can carry up to 15.75 bcm per year of gas.™
Bulgaria gets $616mn in loan offers for TurkStream extension
BULGARIA
Bulgaria’s state pipeline operator Bulgartransgaz launched a tender for only 400mn euros in nancing.
Bulgaria’s state gas pipeline operator Bul- gartransgaz has received offers for €542mn ($616mn) in six-year loans to nance the exten- sion of Russia’s TurkStream gas pipeline, it said on July 9.
Bulgartransgaz launched a tender for €400mn in nancing in early June. It needs to make advanced payments to Saudi-led group Arkad, which it hired last year to build the 474- km Bulgarian stretch of the TurkStream exten- sion, known as the Balkan Stream. It also needs to transfer funds to local group DZZD Ferrostaal Balkangaz, enlisted to construct the pipeline’s compressor units.
“ e combined amount of the o ers totals €542mn,” Bulgartransgaz said in a statement. “ e interest rates for each of the six years of the o eredloansvarybetween1.35%to3.5%.”
Offers came from ING Bank, Citibank Europe, International Bank for Economic Co-operation, VTB Bank Europe as well as the Bulgarian units of Rai eisen, Unicredit, KBC Group, Eurobank and OTP Bank. State-run Bul- garian Development Bank, Municipality Bank
and Budapest-based International Investment Bank also made a joint bid.
Bulgartransgaz will now engage the lenders with the aim of nalising loan contracts.
Bulgaria was due to nish work on its section of the Balkan Stream last year, but there were delays nalising the award of a €1.1bn ($1.2bn) contract to Arkad. It has also taken much longer than anticipated to arrange nancing.
ese setbacks frustrated Russia, with Pres- ident Vladimir Putin threatening in December to reroute Balkan Stream around Bulgaria unless progress was made.
Balkan Stream will connect with TurkStream near Bulgaria’s border with Turkey. A er run- ning through Bulgaria it will traverse Serbia and terminate in Hungary. Serbia completed its 403-kmsectioninlateMarch,althoughitisstill working on support infrastructure.
Bulgarian Prime Minister Boyko Borissov insisted in June that Bulgaria would wrap up work on the pipeline by the end of this year, despite setbacks caused by the coronavirus (COVID-19) pandemic. ™
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