Russia ready for competition in Turkey with cheap gas

DAILY SABAH WITH AA
ISTANBUL
Published 13.12.2018 01:10
Updated 13.12.2018 08:00

Russia is up for competition with other suppliers for Turkey's gas and alternative liquefied natural gas (LNG) sources in the region, Konstantin Simonov, director of Russia National Energy Security Fund, said yesterday.

There has been a decline in Russia's share of Turkey's gas imports with a decrease from 63 percent in 2007 to 52 percent in 2017, Simonov was cited as saying by Anadolu Agency (AA). He also noted that gas is playing an increasing role in the Turkish economy.

Simonov acknowledged the serious competition that Russia is facing in the Turkish market with many alternative source options from Iran and Azerbaijan, and from LNG.

"We see a decline of the share but increasing consumption of Russian gas. But this decline shows that you have an opportunity to buy alternative gas. You have LNG terminals and you are building more, but we're not afraid of this competition," he asserted.

He cited the reason for this confidence is because Russian gas is cheaper than other competitors and explained that Turkey is continuing to consume it because Russia can guarantee supplies to meet increased demand.

Turkey is the fourth-biggest natural gas market in Europe with an annual consumption of 55 billion cubic meters. The country has imported around 387 billion cubic meters of gas from Russia since 1987.

Last year, Turkey imported 28.6 billion cubic meters of gas from Russia, accounting for 51.9 percent of the country's total gas imports, according to the Energy Market Regulatory Authority (EMRA).

He also recognized the possibility that Turkey can receive Turkmenistan gas through a new pipeline as Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan reached a deal on the legal status of the Caspian Sea resources in August.

After the fall of the Soviet Union, the Caspian littoral states started negotiations over the legal status of the sea. However, wide divisions between these countries created a deadlock, preventing the sharing of the sea's rich hydrocarbon resources.

According to the agreement, an area of 15 nautical miles from the coast will be regarded as each respective country's territory.

Simonov further explained that Russia was put to the test during "the jet crisis" between Turkey and Russia in November 2015, in which Moscow opted not to stop gas supplies to Ankara.

"In my opinion 2015 was a serious test for [Russia's state-owned gas giant] Gazprom," he said, adding that if Gazprom did not stop supplies at that time when bilateral relations were at crisis point and in which Gazprom refrained from using the circumstances as a political instrument, then they will not stop for any other reason in the future.

"There was really a serious debate in Russia with major pressure on Putin but Gazprom didn't use natural gas as a political instrument," he declared.

RUSSIA'S GAS SHARE IN EUROPE ON THE RISE

Simonov spoke openly in addressing the concerns that Europe has with increasing gas dependence on Russia.

For the last 10 years, I have heard the warnings over Europe's dependency on Russia gas as "danger, danger danger," he explained, adding that this rhetoric is groundless as there are no examples that show that Russia has used this dependency as an instrument of political pressure.

"In reality we see the increasing share of Russian gas in the European market," he said. "We're still the main player in the European gas market, not only because of cheap gas but because only Russia can supply gas at peak times during the winter."

He claimed that no other country can do so, and cited the example of Norway and the U.S., two countries that are unable to supply extra gas flows.

He concluded that, "LNG won't save you in the cold winter time if the temperature is lower than forecast."

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