Page 12 - FSUOGM Week 24

FSUOGM PIPELINES & TRANSPORT FSUOGM

Beregovaya compressor
station at the Blue
Stream pipeline that
delivers Russian gas
to Turkey. Source:
Gazprom.

Turkish gas importers amass

$2bn debt to Gazprom

TURKEY TURKISH gas importers have racked up a $2bn the country plunging 72% year on year in March,
debt to Russia’s Gazprom, sources told the Wall according to the latest statistics published by
Street Journal on June 15, after failing to meet Turkish energy regulator EMRA. Gazprom
payments under their take-or-pay contracts. consequently lost its position as Turkey’s top
Take-or-pay contracts require buyers to pay supplier, with its share of the market shrinking
for a set amount of gas regardless of whether they to 9.9% from 32.6%. Replacing Russia in the top
actually take that much. Turkish gas demand has spot was Azerbaijan.
seen significant decline in recent years amid an Turkey’s unpaid debts to Gazprom have
economic slowdown, warmer weather and the put the country in a precarious position. In
government’s drive to bolster the use of domestic the past the Russian supplier has used such
coal in power generation. The country’s Russian debts as leverage to consolidate its control
imports have seen particularly heavy decline, as a of a market, by acquiring infrastructure and
slump in LNG prices has made the super-cooled other gas businesses, or in exchange for polit-
gas much cheaper than piped imports. ical concessions.
According to the WSJ, Turkey’s seven private “We see a 3% upside risk to Gazprom’s mar-
gas importers purchased less than 15% of the ket cap if the monopoly succeeds in receiving the
10bn cubic metres they agreed to buy last year. $2bn payment from Turkish importers, as this
Their take-or-pay contracts require them to pay revenue was not recognised in 2019,” BCS Global
for at least 70% of the contractual amount, but Markets wrote in a research note on June 16.
they have not done so. Gazprom has struggled with weaker sales
Turkish gas imports from Russia slumped by across Europe this year because of the impact
more than a third last year to 15.5 bcm, Gazprom of coronavirus (COVID-19) lockdowns on
data shows. Most of this gas was bought by state demand. It swung to a net loss in the first
importer Botas. The decline has been even more quarter, according to Russian accounting
pronounced this year, with Gazprom’s sales to standards. ™

P12 www. NEWSBASE .com Week 24 17•June•2020