Russia’s gas export monopoly Gazprom has agreed to supply Royal Dutch Shell’s Turkish unit with gas until 2021, further boosting its position in Turkey where the gas market is being liberalized.
Gazprom said yesterday it would deliver 250 million cubic meters a year under the deal, which will generate over $900 million in 14 years for the Russian firm, based on Gazprom’s current average export prices of $260 per 1,000 cubic meters.
Gazprom already covers most of Turkey’s gas needs via long-term deals with Turkish energy firm Botas, which is obliged to gradually liberalize gas trading in the country.
As part of the liberalization, Botas has called a tender to transfer part of its 1998 deal with Gazprom to other distributors.
Shell won the tender last year and Gazprom said Shell would begin serving customers in the second quarter of 2007. Gazprom has supplied Turkey with a total of 138 billion cubic meters (bcm) since 1984. The country also imports pipeline gas from Iran and spot liquefied natural gas volumes.
The Gazprom statement said supplies hit an all-time high of 20 bcm last year, up from 18 bcm in 2005.
Russian gas exports to Turkey should rise further as Gazprom wants to expand its Blue Stream pipeline under the Black Sea to serve Turkish end-users.
It is also considering shipping gas to Southern Europe via Turkey – a project that would compete with a plan by BP and Statoil to supply gas from Azerbaijan along the same route.
(Reuters, 28/02/2007)