Price negotiations to start for natural gas

Assistant Chairman of Russian Gazprom, Alexander Medvedev, will pay an official visit to Ankara today to discuss natural gas price revisions which will be valid as of Jan. 1, 2015.

Turkey asked for a discount from Russia on the sale of natural gas last month. Medvedev had stated that they will work on a comprehensive price package to meet Turkey's demand.

Speaking to Reuters, many related sources said that Medvedev will visit Ankara together with Gazprom Export's CEO Elena Burmistrova to hold a meeting with the Undersecretary of the Minister of Energy, Metin Kilci.

The sources further highlighted that the committee of Gazprom was supposed to meet with Energy Minister Taner Yıldız, but since Yıldız is in Ermenek following the mining accident that took place last week, the committee will meet with Kılcı instead.

Another source stated that, along with the price revision and determining the price of natural gas purchased by the private sector, discussions will be held over increasing the capacity of the Mavi Akım (Blue Flow) line running under the Black Sea. It has been agreed that the capacity of Mavi Akım will be increased from 16 billion cubic meters to 19 billion cubic meters, but another source said, "These will all be included in a package."

Russia is currently Turkey's biggest natural gas supplier and BOTAŞ and other private sector companies are expected to purchase 30 billion cubic meters of natural gas from Gazprom this year. Turkey imported around 26.6 out of 45 billion cubic meters of natural gas from Russia in 2013, and 2014 consumption is expected to be around 48 billion cubic meters. Along with the price revision, the increase in natural gas prices will be reflected in six or nine month periods when compared to actual prices. Along with Russia, Turkey purchases natural gas from Iran and Azerbaijan and LNG from Algeria and Nigeria. Additional LNG is also purchased from Qatar on the cash market.