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.


Saudi Arabia backs UAE bid for non-permanent UN Security Council seat

Updated 2 min 40 sec ago

Saudi Arabia backs UAE bid for non-permanent UN Security Council seat

  • The UAE earlier proposed the allocation of a permanent seat for Arabs in the UN Security Council

DUBAI: Saudi Arabia is backing its Gulf neighbor, the UAE’s bid for a non-permanent membership of the UN Security Council for 2022-23.

Khalid bin Muhammad Manzalawi, Saudi Arabia’s Deputy Permanent Representative to the United Nations, called on other countries to support the UAE candidacy during a virtual meeting of the Asia-Pacific Group of the world body.

Manzalawi said the ‘UAE has succeeded in addressing major issues closely related to international cooperation, peace, security, and sustainable development’ and ‘it has a leading humanitarian action, represented through its close cooperation with the United Nations and international partners to reach the common goal of achieving lasting peace in the Middle East and around the entire world.’

The Saudi envoy praised the UAE’s efforts ‘to promote the message of peace, spread a culture of tolerance, in addition to its work in supporting diplomatic efforts aimed at settling disputes by peaceful means through dialogue and confidence-building.’

The UAE earlier repeated its call for the allocation of a permanent seat for Arabs in the UN Security Council, which could be filled by rotation as is done by the League of Arab States.

The enlargement of permanent and non-permanent membership of the Security Council should be consistent and approved by at least two thirds of the members of the General Assembly, Abdul Aziz Nasser Al-Shamsi, the UAE's permanent representative to the UN, has proposed.