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Turkey concludes Azeri gas deal

MIDDLE EAST TURKEY has concluded a three-year natural Ankara, saying Russian pipeline supplies would
gas deal for 11bn cubic metres (bcm) with Azer- shield Turkey from the gas crisis.
baijan, energy minister Fatih Donmez said on As 2021 progressed, Turkey attempted to gain
October 15. more leverage in renegotiating long-term gas
Donmez added that the agreement was for contracts by pointing to the rising availability
the delivery of the gas via the Baku-Tiflis-Erzu- of LNG from the US and other sources. How-
rum pipeline until end-2024. He rejected what ever, when the gas supply crunch started causing
he claimed were efforts to paint a picture of Tur- major difficulties for Europe and other big gas
key facing an energy problem amid the global buyers amid the economic rebound from the
energy shortfalls. Claims that Turkey was pur- coronavirus crisis, Turkey somewhat changed
chasing gas at expensive rates were also refuted its tack and increased efforts to seal new pipeline
by Donmez, who also went on to deny reports deliveries.
that state energy companies Turkiye Petrolleri Turkey was also coming to rely on a steady
and BOTAS are to be sold off. increase in hydroelectric power, but prolonged
Turkey’s is facing record demand for natural drought conditions have undermined that sec-
gas this year amid the economic bounceback tor’s contribution to the grid.
from the coronavirus crisis. That is forcing Turkey consumes between 45 bcm to 50 bcm
Ankara to step up purchases on a surging spot of gas per year, paying between $12bn and $15bn,
market. but with idled gas plants brought back online to
With winter approaching, time is running compensate for the mothballing of hydroelectric
short for Turkey’s energy officials as they negoti- facilities, consumption could surge to a record
ate amid the energy crisis to roll over three long- 60 bcm this year, according to pro-government
term gas import contracts that expire before the publication Daily Sabah. Turkey imported 48.1
end of the year. bcm of gas last year, up 6% y/y. One-third came
Two contracts relate to Russian pipeline gas from Russia. Iran (pipeline) and Algeria (LNG)
shipments of 4bn cubic metres (bcm)/year each, are other suppliers.
while a third contract, which expires this month, Turkey may have to renew all the expiring
concerns 1.3 bcm/year of Nigerian liquefied gas long-term gas contracts with at least the same
(LNG). volumes to meet demand. It may also have to top
A meeting two weeks ago in the Russian Black up its supply with expensive LNG, importing a
Sea resort of Sochi between Russian President little shy of 13 bcm of LNG from spot markets
Vladimir Putin and Turkish President Recep now seeing sky-high prices, the newspaper also
Tayyip Erdogan ended without the conclusion noted. Spot LNG imports so far this year stood
of a gas deal. Putin, however, tried to reassure at 2 bcm, official data showed.™

P8 www. NEWSBASE .com Week 42 21•October•2021