Turkey imports more gas from Azeris than Russians, signals policy shift

Pipe-laying vessel Akademik Cherskiy owned by Gazprom, which Russia may use to complete construction of the Nord Stream 2 gas pipeline, is seen in a bay near the Baltic Sea port of Baltiysk, Kaliningrad region, Russia May 3, 2020. (REUTERS)
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Updated 02 June 2020

Turkey imports more gas from Azeris than Russians, signals policy shift

  • In March, Turkey received 924,28 million cubic meters of Azeri gas, comprising 23.45 percent of the total volume of gas supplies to Turkey and pushing Iran and Russia to second and third place respectively as gas providers

ANKARA: Ankara has been importing more Azeri gas in the past couple of months in a move to reduce its dependence on Russian and Iranian gas.
Experts say that recent political conflict between Ankara and Kremlin, first in Syria and then in Libya, might have played a political role in a change that also suggests political calculations.
In the first quarter of this year, Azerbaijan exported 2.7 billion cubic meters of gas to Turkey from the Shah Deniz field — 20 percent more than the same period last year, according to official data from the Energy Market Regulatory Authority of Turkey.
Although Ankara and the Kremlin this January launched the $7.8 billion, 930 km TurkStream pipeline to bypass the Ukraine, Azerbaijan, as a major gas supply competitor, is gradually establishing a foothold in the Turkish market and for the first time overtaking Russia as the largest gas supplier.
In March, Turkey received 924,28 million cubic meters of Azeri gas, comprising 23.45 percent of the total volume of gas supplies to Turkey and pushing Iran and Russia to second and third place respectively as gas providers.
Gazprom’s share in Turkish gas imports fell below 10 percent from 33 percent compared to March 2019, with its exports declining by 72 percent; liquefied natural gas (LNG) imports from the US tripled in the same period at nearly 1 million tons. John Roberts, an energy security specialist and a member of the UN Economic Commission for Europe Group of Experts on Gas, said that both Russian gas giant Gazprom and Azerbaijan’s state energy company SOCAR — acting as salesman for the Shah Deniz consortium — have delivery contracts that they both have to honor.
“As these contracts contain pricing formulas, the price of the gas cannot be changed unless the prices are renegotiated,” he said.
According to Roberts, at a time of generally low international gas prices, this means in practice that Turkish buyers have to convince Gazprom and SOCAR to lower their rates.

Gazprom customers in Turkey remain very unhappy at the cost of Russian deliveries. So Turkish customers, including Turkish state energy company BOTAS, seem to be opting to purchase Azeri gas whenever possible.

John Roberts, Energy security specialist

“It appears that SOCAR may be more flexible than Gazprom in this regard. Meanwhile, Gazprom customers in Turkey remain very unhappy at the cost of Russian deliveries. So Turkish customers, including Turkish state energy company BOTAS, seem to be opting to purchase Azeri gas whenever possible,” he said.
Azerbaijan’s SOCAR also plans to list its Turkish subsidiary on the London, Hong Kong and Istanbul stock exchanges next year.
However, although the dispute with Gazprom is primarily commercial and has been running for several years, Roberts thinks that an inclination toward Azeri gas has a political dimension as well.
“If a supplier is not flexible about prices when the price of gas is generally so low, it leaves the consumer to worry whether it is sensible to rely so much on such a dominant supplier,” he said.
“Since BOTAS, which is responsible for handling the import of most of Turkey’s gas, is a state company, this means that political calculations concerning Russia’s share of the Turkish market are bound to play a role, particularly as Turkey negotiates replacement contracts for existing supplies of Russian and Azeri gas.”
Shaky political relations between Turkey and Russia due to their different political priorities also play a role in changing energy preferences, especially at a time when both Russian and Azeri gas are waiting for a renewal of contracts.
“Other political factors, notably Turkey’s sometimes strained relations with Russia due to the conflicts in Syria and Libya, as well as its traditional friendship with Azerbaijan, will play a role in determining the shape of future contracts,” Roberts said.  
“From a Turkish perspective, the real issue is getting Russia and Azerbaijan — and also Iran and various suppliers of LNG — into a competitive situation so that they compete on price for a very substantial market,” he said.
Meanwhile, the National Iranian Gas Company officially notified Turkey’s Botas on Monday about a lack of cooperation on the resumption of natural gas imports from Iran. The flow of Iranian gas to Turkey was disrupted two months ago due to a pipeline explosion.


Dubai reopens doors to tourists after long shutdown

Updated 47 min 13 sec ago

Dubai reopens doors to tourists after long shutdown

  • Incoming tourists are required to present a negative test result taken within four days of the flight
  • Dubai is known for its mega malls, high-end restaurants and five-star hotels and resorts

DUBAI: With a “welcome” passport sticker and coronavirus tests on arrival, Dubai reopened its doors to international visitors Tuesday in the hope of reviving its tourism industry after a nearly four-month closure.
But businesses are mainly betting on those already living in the gleaming desert city to energise its ailing economy and serve as a test run before wary foreign holidaymakers return.
“A warm welcome to your second home,” said the sticker applied to passports at Dubai airport, where employees wore hazmat suits and vending machines offered personal protective equipment.
Italian tourist Francesca Conte said on arrival she was worried up until the last minute that her flight would be canceled.
“When I saw passengers queueing at the gate, I thought today we are not leaving, since the trip to Dubai had already been skipped three times,” Conte said.
She said she felt sad “seeing empty spaces” on the plane and stewards and hostesses “dressed like nurses and doctors,” in their lab coats.
The reopening Tuesday came as the number of COVID-19 cases in the United Arab Emirates climbed to 52,600 included 326 deaths, with millions of foreign workers living in cramped accommodation particularly hard hit.
Incoming tourists are required to present a negative test result taken within four days of the flight. If not, they can take the test on arrival, but must self-isolate until they receive the all-clear.
Tourism has long been the lifeline of the glitzy Gulf emirate, one of the seven sheikhdoms that make up the UAE.
High season starts in October when the scorching heat of the Gulf summer starts to dissipate.
Dubai welcomed more than 16.7 million visitors last year, and before the pandemic crippled global travel, the aim had been to reach 20 million arrivals in 2020.
“We are ready to receive tourists while we take all necessary precautions,” said Talal Al-Shanqiti of Dubai’s General Directorate of Residency and Foreigners Affairs in a video message tweeted on Sunday.
With scant oil resources compared to its neighbors, Dubai has built the most diversified economy in the Gulf, boasting a reputation as a financial, commercial and tourism hub despite an economic downturn in recent years.
The city-state is known for its mega malls, high-end restaurants and five-star hotels and resorts.
But all have taken a severe hit during the coronavirus outbreak, and Dubai’s GDP in the first quarter of 2020 contracted 3.5 percent following two years of modest growth.
Dubai-based airline Emirates, the largest in the Middle East, has been forced to slash its sprawling network and is believed to have laid off thousands of staff.
Before reopening to international tourists, authorities launched social media campaigns and deployed hundreds of social media “influencers” to tout Dubai’s attractions.
As the hospitality business works out how to create an environment that follows strict hygiene rules but is still worth the hassle for potential foreign clients, hotels are offering Dubai residents “staycation” and “daycation” deals to offset the slump.
Restarting hospitality by “primarily targeting the domestic market is an important first step in our phased approach toward restoring normalcy in the tourism industry,” said Issam Kazim, CEO of the Dubai Corporation for Tourism and Commerce Marketing.
And key to the effort are health and safety measures at hotels to “reassure guests and travelers that Dubai is one of the world’s safest destinations,” he said in a statement last month.
Boosting domestic tourism is also part of the strategy of the UAE’s other main destination, the oil-rich capital Abu Dhabi, which welcomed a record 11.35 million international visitors in 2019.
The UAE’s capital is home to top attractions including an F1 circuit and the Louvre Abu Dhabi museum, which in late June opened its doors to masked, gloved visitors after a 100-day closure.
But the emirate does not share Dubai’s enthusiasm about opening doors to foreign tourists just yet, although those with negative test results are now allowed to enter.
“Plans have changed and we are not expecting to have the same numbers of 2019 this year definitely. It would take another two to three years,” said Ali Al-Shaiba, executive director of tourism and marketing for the Abu Dhabi Department of Culture and Tourism.
“As of today, I can say domestic tourism is what is in our plan. We believe domestic tourism is key now and we don’t see us opening for international travelers very soon,” he told AFP on Monday.