Private companies set to launch imports of Russian gas into Turkey

By bne IntelliNews November 27, 2012

bne -

Turkey's energy market regulator on November 26 rubber stamped the licences of four local private companies to launch Russian gas imports through the Western Line pipeline, which runs through Ukraine, Romania and Bulgaria.

Akfel, Bati Hatti, Bosphorus and Kibar agreed contracts with Russian exporter Gazprom in September to import 6bn cubic metres of gas per year (cm/y). They have all now been handed 30 year licences for the operation, except for Bati Hatti, whose approval lasts only 23 years.

"The deal is very important for Gazprom. Turkey has always been a significant and stable partner for us," an official for Gazprom Export, the company's export arm, told Reuters.

The private companies were invited to tender for the route after state-pipeline operator Botas elected last year not to extend a 25-year contract with Gazprom due to the Russian company's refusal to offer it a pricing discount. Faced with similar demands across Europe, its little wonder Gazprom is happy to secure a new long term agreement to supply Turkey's rapidly growing economy.

The contract with Botas ran to September. Since that time, gas has been shipped on a short term basis. The private companies will be required to keep 10% of the imported gas in TPAO's state storage facilities in Silivri.

According to Botas, Turkey imported 39.7bn cm of gas last year, with Russia followed Iran and Azerbaijan in terms of volumes sold to the country. However, the developing economy is heavily dependent on the fuel for producing electricity, and imports are expected to steadily rise as the country continues to develop.

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