Page 10 - Downstream Monitor - MEA Week 27

DMEA PiPeLines DMEA
a demand basis through the existing pipelines. One of the advantages of the new pipeline for Turkey is the constant ow of gas over its terri- tory on its way to europe that will improve Tur- key’s energy security.
e Turkish gas market su ered a setback last year, hurt by economic turmoil in the country, reports VTBC. “As a result, Turkish gas con- sumption fell 8.4% y/y to 49.3bcm in 2018, with Gazprom’s gas exports to the country falling 17% y/yto24bcm,”VTBCreports.
“ePPeN Consulting, a Turkish consulting rm, expects gas demand in Turkey to uctuate in a 48-50bcm range in 2019-2023. In the longer term, though, gas demand might be potentially supported by the increased competitiveness of Turkish industry due to lira depreciation, with WoodMac forecasting more than 60bcm gas demand by 2035.
In this case, if both direct pipelines to Turkey (Blue Stream and Turkish Stream) were fully uti- lised, Gazprom might be able to satisfy up to 53% of Turkish gas demand.”
While gas prices in europe have shrunk to a multi-year low, the demand remains strong.
Last year Gazprom exported almost 200bcm to europe, and has kept its forecast for this year at 198-201bcm and $230/kcm average price.
At the same time Ukraine’s national gas com- pany told bne IntelliNews that it expects to be cut o from Russian gas completely on January 1, 2020 and is also building up reserves. If Rus- sia breaks its supply and transit agreement with Ukraine at the end of this year then that could lead to shortages in europe, hence the build-up of reserves going on now.
european gas demand grew 1.1% y/y (or +3.1bcm) in the rst half of this year, supported by increased demand in power generation (+13% y/y or 10.7bcm), VTBC reports.
“Nevertheless, Gazprom’s export volumes were pressured by the increased LNG export to europe, which are up 93.7% y/y, or 29.9bcm. in 1h19, falling 5.9% y/y to 95.3bcm over the period,”VTBCsaid.
Analysts are less optimistic about Gazprom’s exports to europe and are forecasting 191bcm export and $223/kcm average price. however, if Gazprom does cut Ukraine o then exports to europe could fall signi cantly.™
Lagos pipeline explodes
afriCa
AN explosion in a Lagos suburb at a pipeline has le at least eight people dead. A product pipeline in the Ijegun area, to the north of Lagos, spilled and then ignited on July 4. A similar accident occurred in 2008 in the same area and this fol- lows a tanker re in Benu State on July 1.
e News Agency of Nigeria (NAN) quoted the National emergency Management Agency (NeMA) as saying the Ijegun pipeline re last week had taken 17 hours to extinguish. Punch put the number of dead at eight, while there seems to have also been substantial property damage. The fire started at around 5 am and engulfed a number of homes.
Statements from the Lagos State government said the re was near the Ijegun tank farm. e state blamed vandals for bunkering fuel from the pipeline. e bunkerers had moved a rst load into a tanker and were starting on a second when security agents appeared. e thieves tried to ee
and in so doing some fuel was spilled.
“The vandals were alleged to have set the spilled fuel on re in a bid to prevent the secu- rity agencies from apprehending them,” the state said, with the re spreading back to the pipeline that the product had been taken from. Other reports have suggested the re may have been
caused by a motorist starting his engine.
At the beginning of July, a tanker exploded in the Gwer local government area of Benue, with the death toll estimated at 50, with another 70
said to be injured.
The tanker appears to have broken down
and villagers gathered in order to take fuel. It is unclear what sparked the re.
e 2008 pipeline explosion also damaged homes and a school, with the death toll uncer- tain. O cial sources have put the gure at 10, but others have put it higher, with the Nigerian Red Cross claiming at least 100 had died.™
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w w w . N E W S B A S E . c o m Week 27 10•July•2019