Page 6 - EurOil Week 43 2021

EurOil COMMENTARY EurOil

Balkan Stream countries hope

to avoid worst of gas crisis

Those with long-term supply contracts are faring better

BALKANS WHILE the debate rages over the Nord Stream would not face energy shortages this winter.
2 pipeline, a separate pipeline system carrying This is despite an expected rise in consumption
Russian gas to Southeast Europe has been qui- this year as the economy revives and the recent
etly opened over the last few years, and is now drought cut production of hydropower.
enabling the countries along its route to avoid “We have pipelines coming from the Black
the worst of the energy crisis. Sea, the Blue Stream, another one from Azerbai-
Like Nord Steam and Nord Stream 2, Bal- jan and a pipeline from Iran. We have added two
kan Stream, an extension of Gazprom’s Turkish floating LNG [liquefied natural gas] terminals,
Stream pipeline that runs via Southeast Europe called FSRUs [floating storage and regasification
to Hungary, bypasses Ukraine. Yet in compari- units],” Donmez told private broadcaster NTV.
son to its northern counterpart that has sparked He also noted that the country has increased its
an international debate and criticisms of Russian underground storage capacity.
gas diplomacy, Balkan Stream has generated rel- From Turkey, Balkan Stream runs to Bulgaria
atively little comment. where, despite the Energy and Water Regulatory
Balkan Stream is an extension of Turkish Commission (KEVR) approving increases in
Stream (or TurkStream) that runs from Russia the price of natural gas recently, the country still
under the Black Sea to Turkey. It has a capacity of expects users to pay a relatively low price, thanks
31.5bn cubic metres (bcm) of gas per year, part of to Bulgaria’s sourcing of gas from both Gazprom
which is earmarked for several Southeast Euro- and Azerbaijan’s Socar. In particular, Bulgaria
pean countries. has the scope to increase the gas it is importing
The route links in many of the countries that from Azerbaijan, Bulgargaz CEO Nikolay Pavlov
would have been served by the aborted South said according to Reuters.
Stream project that would have delivered Russian Meanwhile, the Russian Ambassador to Bul-
gas to Bulgaria then on to other countries in the garia Elena Mitrofanova proposed that Bulgaria
region, but was scrapped when it was found not sign a new long-term gas supply contract with
to comply with EU legislation. As pointed out by Gazprom in the context of rising spot prices,
Russia hawks, the two pipelines are suspiciously Mitrofanova said as reported by RIA Novosti.
similar and questions have been raised about the
financing for various legs of Balkan Stream. Cheap gas in Serbia
With international gas prices rising, govern- Gas started to flow to both Serbia and Bosnia &
ment officials from states along the pipeline net- Herzegovina’s Republika Srpska at the beginning
work — which most recently linked in Croatia of this year – the same time as Turkish Stream
and Hungary — have sought to reassure their went on line that have seen Russian deliveries
populations that they will face neither gas short- of gas to Turkey rise 200% y/y. Serbia’s Presi-
ages nor exorbitant price hikes. dent Aleksanda Vucic has taken a bullish tone
As bne IntelliNews has reported the crisis in recently, promising citizens the “cheapest gas
Europe was caused by a “V” shaped market; a in Europe’’ and homes warm enough to walk
combination of factors including the reopening around in t-shirts this winter.
of industrial capacity as the coronacrisis eases, a Vucic told local media on October 8 that
hard winter and a hot summer, accidents to sup- Serbian citizens don’t have to worry about gas
ply infrastructure and higher demand for lique- or electricity supplies, and that prices will not
fied natural gas (LNG) from Asia. While Russia rise. “Serbian citizens will have warm rooms so
has been blamed in some quarters for the crisis, that they can walk around in T-shirts. There are
as bne IntelliNews columnist Mark Galeotti no problems, we don’t even intend to increase
argues, Moscow has been fulfilling its contract the price of gas and electricity, we can endure
commitments and is supplying close to record everything if we raise the capacities of the elec-
levels of gas. trical system,“ he said, TV N1 reported.
Saying that he will personally ask his Rus-
Diversified supply sian counterpart Vladimir Putin to help Serbia
In addition to Turk Stream, Turkey has several through the energy crisis, Vucic blamed the
other import options, as outlined by Energy and energy crisis in Europe on European countries
Natural Resources Minister Fatih Donmez on not having signed long-term agreements with
October 8, when he forecast that the country Russia, reported TASS.

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