Page 14 - FSUOGM Week 20

FSUOGM PIPELINES & TRANSPORT FSUOGM
Turkey drops Russian pipe gas for Yamal LNG
Novatek’s Yamal LNG plant while it was under construction.
TURKEY
RUSSIA’S Yamal LNG plant reportedly delivered a spot cargo to Turkey last month.
Reuters on May 14 quoted trading sources and LNG tracking data in reporting only the second such delivery to date, noting that lower LNG prices were undermining Moscow’s natural gas pipeline exports to a key market.
In Russia, only state giant Gazprom can export gas via pipeline. However, private gas producer Novatek has the right to export LNG. Moscow has long said its gas exports should not compete but should rather complement each other. However, with demand weak amid the coronavirus (COVID-19) pandemic, super- cooled LNG is much cheaper than the gas that sent via pipelines according to pricing terms that are largely fixed.
According to two traders and LNG track- ing data cited by the news agency, Turkish state energy company Botas last month bought a Yamal LNG cargo in the spot market from Total, one of Novatek’s partners at the Yamal plant. Rebecca Chia, an analyst with data intelligence firm Kpler which tracks LNG shipments globally, told Reuters that a 65,000-tonne cargo originat- ing from Yamal was delivered to Botas on April 13 after a ship-to-ship (STS) transfer.
Chia said that the only previous Yamal-origin LNG cargo was delivered to Turkey in early 2019.
Russia supplies gas to Turkey via the Turk- Stream and Blue Stream undersea pipelines traversing the Black Sea. They have a total capac- ity of 32bn cubic metres (bcm) per year.
Gazprom sales to Turkey fell by 35% to 15.5 bcm last year.
Gazprom planned maintenance at Blue Stream for May 13-19 but the works have been extended by 10 days. A Turkish energy source told Reuters that Botas is expected to buy more LNG in the spot market, while the Blue Stream maintenance allowed the company to limit pur- chases from Gazprom.
“For Botas it makes sense to reduce pipeline imports from Russia and substitute this with spot LNG supplies as LNG is currently much cheaper,” Carlos Torres Diaz, head of gas mar- kets at Oslo-based energy consultancy Rystad Energy, was quoted as saying by the news service.
He estimated that the price for pipeline imports from Russia to Turkey would stand at around $6.5 per million British Thermal Units (MMBtu) in the second quarter compared to $1.5-2 per MMBtu for spot LNG deliveries.
“A fall [in gas sales to Turkey] will be even deeper in the second quarter,” a Gazprom source told Reuters, adding that overall shipments to Europe, including Turkey, were down 19.2% y/y to 39.62 bcm in the first quarter.™
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w w w . N E W S B A S E . c o m Week 20 20•May•2020