Russia's state-controlled Gazprom is working on sales agreements with potential Turkish buyers to make sure that they receive import licences to buy Russian gas.
Turkish energy regulator EPDK gave permission to Turkish private-sector firms to buy up to 6bn m³/yr of Russian gas through the western corridor starting from 1 January 2013, EPDK said today. The western supply route goes to the Marmara industrial region, which includes the city of Istanbul and several large power plants.
This permission is the first step required for private-sector Turkish firms to receive import licences, which must be applied for by 10 August.
Private-sector firms must also submit a sales agreement with Gazprom, but it is unclear whether the regulator would accept a draft agreement or would insist that a final deal be completed before a licence is granted.
EPDK refused to provide import licences for 26 Turkish private-sector firms last year on the grounds that they did not have sales agreements in place with Gazprom. At the time, Turkish gas distributor BosphorusGaz — in which Gazprom holds a 71pc stake — and engineering firm Akfel were frontrunners for the Russian supply, which would have ramped up from 4bn m³/yr in 2012-14 to 5bn m³ in 2015 and 6bn m³ in 2016.
Gazprom already sells 4bn m³/yr to four private-sector firms in Turkey — BosphorusGaz, Enerco Enerji, Shell Energy and Eurasia Gaz — through the western route under contracts that expire in 2022. Turkey's state-owned Botas takes the same volume through the western route with another 10bn-16bn m³/yr arriving through the Blue Stream pipeline in the east of the country.
Botas had a separate 6bn m³/yr contract to import Russian gas through the western route, but did not extend the agreement when it expired last year.
Botas' reduction of gas imports from Russia could prove beneficial for the BP-led Shakh Deniz consortium in Azerbaijan, which could step in to provide at least some of the supply that used to be delivered by Gazprom.
Shakh Deniz exported around 4bn m³ to Botas last year. This was 2.6bn m³ less than what was contractually agreed, despite Azeri gas prices that were almost $100/'000m³ lower than the price under Botas' Russian supply contract, with take-or-pay obligations thought to be the reason for the under delivery of Azeri gas.
Botas' existing 6.6bn m³/yr contract with Shakh Deniz expires in 2021, and the firm is committed to buy another 6bn m³/yr from Shakh Deniz phase two starting in 2017-18, at a price set at a discount to Gazprom's oil-linked formula.
Turkey imported 39.7bn m³ of gas last year, with almost 24bn m³ bought from Russia. Iran and Azerbaijan supplied 10bn m³ and 4bn m³ respectively. The remaining 1.7bn m³ was imported as LNG. In the long term, Turkey hopes to diversify its suppliers to include Turkmenistan and Iraq.