Tuesday, October 04, 2011

Natural gas long term agreement with Russia

Natural gas agreement with GazProm of Russia for 6-bcm gas supply will be finalized as of 31st Dec 2011, let us be clear on that decision.
The Long-term Agreement  is NOT terminated, NOT cancelled but it will be finalized, not renewed as of 31st December 2011
It is not termination but finalization of long-term agreement
West pipeline gas capacity will be allocated to private gas distribution companies to buy gas direct from Russia.
There is no difficulty on Russian side, since they can keep their gas supply underground for long term, until they create a new opportunity to sell at good price in international markets.
Turkish West Natural gas pipeline will continue Russian gas supply until 31st December 2011 plus some more time for take- or- pay settlement
Question is whether Turkish gas market is ready to fulfill the Natural Gas shortage, which may will be occur after West pipeline gas supply agreement finalization (not cancellation) with Russia.
West pipeline will be allocated to private gas distribution companies to buy gas direct from Russia, no termination but finalization agreement
It is expected/ presumed that there is an ongoing negotiation for Private gas supply agreements between private companies and GazProm, but  these are not made public yet.
Anyhow these agreements will be kept confidential at all times, and Russians will try to keep the current international natural gas market price levels.
In Turkish West Natural Gas pipeline gas distribution, the supply risk is in in-city gas distribution companies of Edirne, Çanakkale and Istanbul
We may face with gas pressure drops, shortage of gas supply in Edirne, Çanakkale and Istanbul gas distributions
Privatization scheme/tender for Natural gas firing 1120Mwe Hamitabat combined cycle power plant is cancelled. Plant has gas supply risk.
Russian natural gas supply is important for Turkish domestic energy generation and it is a long term commitment for both countries.
However supply security, too much foreign dependency  and current account deficiency are the difficulties of Turkey, it is obvious that there should be countermeasures to reduce these risks.
Solution is in more intelligent investments on renewable energies solar/ wind/ small hydro,  and local coal/ lignite firing clean coal technologies. Your comments are always welcome.


Post a Comment

<< Home

Click to join EnergyNewsletterTurkey

Click to join EnergyNewsletterTurkey

Free Blog Counter