Russia, Turkey In Talks To Keep Same Gas Volume In Renewed Deals
WinkelmannRussia and Turkey are in talks to keep up the volumes of gas supplies from Gazprom PJSC as they negotiate the renewal of two major pipeline supply deals, according to people familiar with the matter.
Russia and Turkey are in talks to keep up the volumes of gas supplies from Gazprom PJSC as they negotiate the renewal of two major pipeline supply deals, according to people familiar with the matter.
The contracts between Russia's gas giant and Turkey's state company Botas for combined deliveries of as much as 21.75 billion cubic meters a year are set to expire on Dec. 31. Russia and Turkey are negotiating to keep the annual flows at about 22 billion cubic meters, the people said, asking not to be identified as the information isn't public.
Gazprom didn't immediately respond to a Bloomberg request for comment sent during a public holiday in Russia. Turkey's Energy Ministry didn't comment. Botas didn't reply to a query seeking comment.
Gas market watchers have been questioning the future of Russian gas flows to Turkey amid growing pressure from US President Donald Trump's administration to curb energy purchases that help the Kremlin fund its war on Ukraine. Following US sanctions on Russia's two biggest oil producers last month, Turkey's oil refiners have started cutting imports of Russian crude.
Turkey has previously pushed back on Western efforts to stop it from buying Russian gas, which is mostly traded through long-term contracts via extensive pipeline connections between the two countries. In September, however, Turkey agreed to a string of contracts to buy liquefied natural gas, including from the US. With Turkey's own production from the Black Sea set to grow, it may end up with more gas than it needs.
Turkey's large market has been a lifeline for Gazprom, which has all but lost the European gas market after the war triggered a push for diversification of supplies. This should give Turkey leverage to negotiate discounts in a renewal of supply deals.
Last year, Gazprom shipped 21.6 billion cubic meters to Turkey, according to Bloomberg calculations based on data from the nation's energy regulator EMRA. These volumes made Turkey the second-largest buyer of Russian pipeline gas after China, helping prop up Gazprom's financial results for the year.
By comparison, when shipments of Russian crude via Ukraine to Europe stopped early in the morning on Jan. 1, those volumes exceeded 15 billion cubic meters per year.
Piped gas flows from Gazprom historically dominated supplies to Turkey, the fourth-largest gas market in Europe and almost entirely dependent on imports. Iran and Azerbaijan have also provided significant shares of the total import mix.
