Turkey's $ 2 billion debt for Russian gas will prevent Ankara from switching to US LNG

Seven Turkish companies have accumulated about $ 2 billion of debt for gas to Gazprom. The companies previously committed to purchase large volumes of blue fuel under long-term contracts from a Russian concern using the take-or-pay formula. In 2019, they bought only 15 percent of the previously planned volumes and because of this, they could not pay the necessary amounts to the supplier. This was reported by the Wall Street Journal.

Turkish firms refuse to repay financial debt to a gas supplier. Experts do not exclude that negotiations on payments will be transferred to the interstate level.

According to the source, such impressive debts to the Russian gas corporation will not allow official Ankara in the foreseeable future to make purchases of American liquefied natural gas to reduce dependence on fuel from Russia.

According to the results of last year, the Turkish authorities reduced the volume of purchases of Russian gas by about a third to 15,5 billion cubic meters per year. This has become the lowest level of gas purchases from Russia by Turkey over the past 15 years.

On January 8 this year, the Turkish and Russian presidents held the inauguration of the Turkish Stream gas pipeline in Istanbul. Through this pipeline, Ankara will receive 15,7 billion gas fuel each year. On January 5, North Macedonia and Greece began to receive gas via the Turkish Stream, and fuel supply to Bulgaria began on January 1.
  • Used photos: gazprom.com
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  1. Bakht Offline Bakht
    Bakht (Bakhtiyar) 15 June 2020 18: 29
    Zadolbalo this "European direction".
    Cancel all contracts. 100% prepayment and they will have gas (happiness). And from time to time to say "No gas. Buy on the market."
    1. Natan bruk Offline Natan bruk
      Natan bruk (Nathan Brook) 15 June 2020 21: 05
      Americans will thank you from the bottom of their hearts. But Gazprom, which is already at a loss, will be in a disastrous situation. And the blow to the Russian budget will be what we need. All in all a great offer.
      1. Bakht Offline Bakht
        Bakht (Bakhtiyar) 15 June 2020 21: 13
        Of course, great. In any case, this is better than giving away gas for nothing.
        1. Natan bruk Offline Natan bruk
          Natan bruk (Nathan Brook) 15 June 2020 21: 35
          How? Europe does not pay for gas supplied under the contract?
          1. Bakht Offline Bakht
            Bakht (Bakhtiyar) 15 June 2020 21: 36
            Poland has already run to court. Bulgaria too. The amounts stipulated in the contract do not pay.

            And here we are talking about Turkey. Although Turkey is a European destination.
            1. Natan bruk Offline Natan bruk
              Natan bruk (Nathan Brook) 15 June 2020 21: 57
              What court, for what reason? You are confusing something. Another thing is that Turkish companies do not choose the agreed volumes, but the reasons are known - the abnormally warm winter, clogged to the eyeballs of the gas storage. Well, there is a court to resolve such issues.
              1. Bakht Offline Bakht
                Bakht (Bakhtiyar) 15 June 2020 22: 04
                For these cases, there is no court, but the terms of the contract.

                Poland requires a review of contract prices. Antitrust law, you see. And when they concluded the agreement, didn’t they know that Gazprom was a monopolist? Bulgaria has achieved pricing changes and price reductions of 40%. Belarus is constantly scandalous and requires low prices.
                In this particular case, Turkey is demanding a change in the contract and the abolition of the take-or-pay rule. And Stockholm, in the case of Ukraine, canceled this rule. The point is that the judgment is unrighteous. The rule "take or pay" was canceled, and the rule "download or pay" was left. I'm tired of this "European direction".

                What is the meaning of the contract, if it can be changed in a couple of years? Europe requires pegging to spot prices. Then the long-term contract itself becomes meaningless. Let them buy at market prices on a hub in the Netherlands. This is a requirement of the EU. But will there be gas or it will not be, this is no longer the problem of Gazprom.

                I repeat. If everyone runs to court to review the pricing, then all contracts must be canceled. To supply gas to a hub in Austria and let anyone need it, from there it buys. At market prices. And if there is no gas, then there is no and no court.
                1. Natan bruk Offline Natan bruk
                  Natan bruk (Nathan Brook) 15 June 2020 22: 12
                  Well, a good offer. And if they switch to American spot gas, there are also gas pipelines from Azerbaijan, for example, Norway, England, but they won’t take yours, what will you do with yours? To heat the atmosphere? And by the way, for unilateral, and not through the court, "zeroing" will definitely get very good fines. And you have to pay.
                  1. Bakht Offline Bakht
                    Bakht (Bakhtiyar) 15 June 2020 22: 21
                    Let them move. Who is against it. Spot trading is a haven for speculators. Now that the United States has gas, prices are low. What will happen when the market stabilizes?
                    The lowest price in Qatar is $ 1 for 1 million BTUs, From $ 2 to $ 2,5 for the liquefaction-liquefaction process. Approximately 1-1,5 dollars transportation. Total market price of LNG is at least $ 4 per 1 million BTUs. That makes about 150 bucks per thousand cubic meters. GazProm suits this price more than.
                    Interesting picture. Revision of the contract, for example, only in the direction of the buyer? If the client does not like the contract, then it must either be rewritten or nullified. I am not for one-sided zeroing. I do not like the contract, it was not necessary to sign.
                    Real life example. The contract for Poland ends in June 2021. At first, the Poles proudly declared that they would no longer buy gas from Yamal and would not renew the contract. They are already saying that they are ready to buy Russian gas at a "fair price". I think that for Poland it is necessary to introduce a fixed price of 200 dollars per thousand cubic meters. Or let them buy in the States. LNG for Poland from America costs about this amount.
                    PS By the way, all US LNG contracts have a "liquefy or pay" clause.
                    1. Natan bruk Offline Natan bruk
                      Natan bruk (Nathan Brook) 15 June 2020 22: 30
                      Oddly enough, today in many cases spot gas is cheaper than pipe gas, since there are no long-term contracts and everything is changing rapidly, you can maneuver. It is not in vain that Turkey itself is constantly reducing the share of pipe gas and increasing the share of LNG. And all controversial issues under contracts are resolved exclusively through the court. No other way. Let Gazprom finally find normal lawyers and managers, and then everything will work out for it.
                      1. Bakht Offline Bakht
                        Bakht (Bakhtiyar) 15 June 2020 22: 36
                        Spot gas is cheap for several reasons.
                        An abnormally warm winter, an excess of associated gas in the extraction of oil shale, a lockdown of the global economy. None of these signs can be long-term or predictable.

                        The take-or-pay principle is not an invention of Gazprom. Europe has worked on this principle since the 70s. The manufacturer must know exactly what sales volumes he can expect. The development and construction of gas fields is a multi-billion dollar cost.
                        But as soon as the Groningen field ended in Europe, cries immediately appeared that the "take or pay" principle was not a market one.
                        This is a cheating game from the EU. Gazprom signed long-term contracts for the Grononingen model. For 10-15-20 years. Now these contracts are beginning to end. No lawyers needed. It is necessary to complete the Altai gas pipeline (I have always said that it is more important than the Power of Siberia) and redirect gas from Yamal (European gas) to China and India.
                        And NOVATEK will supply gas to Europe at spot prices. If anything remains.
                      2. Natan bruk Offline Natan bruk
                        Natan bruk (Nathan Brook) 15 June 2020 22: 42
                        Beautifully, of course, only China has greatly reduced the consumption of Russian gas and from time to time generally ceases to take it. The Power of Siberia wasn’t paying off anyway, but today it’s clear that this is a completely unprofitable project. Well, NOVATEK will not save Gazprom in any way. Its share in Russian gas exports is very small.
                      3. Bakht Offline Bakht
                        Bakht (Bakhtiyar) 15 June 2020 22: 50
                        This is all unknown information.
                        But to give gas, not to receive money for it, and then also to pay fines - this is not a very beautiful situation.
                        A lot has been said about the loss-making of the Power of Siberia project, but so far this is also unknown. And NOVATEK is not a competitor, but an assistant to Gazprom.
                        By the way, I did not respond to your offer

                        today, in many cases, spot gas is cheaper than pipe gas because there are no long-term contracts

                        This is fundamentally wrong. LNG in the Netherlands costs $ 42 per thousand cubic meters. Arithmetic is simple. This is gas from shale. States do not know where to put it. Total, and several other companies refused to take it and paid the cost of liquefaction-liquefaction. Under the contract. The cost price is zero (it must either be burned, or sold to someone). Transportation, as I already wrote, 1 dollar.
                        That is, LNG terminals received the cost of liquefaction for this gas and are now selling it on the spot market at the transportation price. That is, for 1 dollar for 1 million BTUs. This is 37 dollars per thousand cubic meters.
                        So the point is not in long-term contracts, but in an excess of shale gas. But the shale is dying, there will be no associated gas. What will be the cost on the hub? Nobody knows that. And in the absence of this knowledge, it makes no sense to invest in new projects for the development of Arctic gas.
                        So I'm completely and completely for gas pipelines in different directions. Especially for the Power of Siberia 2. I wrote about this two years ago. He is more important than all others. And for the failure to develop new deposits.
                      4. Natan bruk Offline Natan bruk
                        Natan bruk (Nathan Brook) 15 June 2020 23: 06
                        Who told you that the shale is dying? Miller? By the way, I remember how he said that shale is supposedly a big scam and nothing more. Everything turned out quite differently. Yes, and get LNG not only from oil shale. As for the loss-making, the Power of Siberia is very well known, everything has been calculated repeatedly, and given the drop in Chinese demand, it is still worse than it looked at the beginning. This is a purely political project, but not an economic one. Well, NOVATEK, of course, is not a competitor to Gazprom. How can he be a competitor? It’s just that his share is small and he won’t make any special weather for the budget. And the deterioration of Gazprom’s affairs in the foreign market has a very noticeable impact on the budget, since it is one of its main fillers.
                      5. Bakht Offline Bakht
                        Bakht (Bakhtiyar) 15 June 2020 23: 18
                        As for the shale, it was not Miller who told me, but the data on drilling rigs in the States. Perhaps he will be reborn. Large companies got down to business. But it is unlikely that it will be soon. The decline in production in the States is at the moment a fact.
                        The power of Siberia has not yet been calculated. Tired of mantras about "political projects". And the Nord Stream, and Turkish, and the Power of Siberia. Wherever you spit - everywhere "political projects". But Baltic Pipe is a purely "economic project" ...
                        All projects fit the same definition. As Europe speaks of diversification of deliveries, so Russia wants diversification of consumers. Practice has shown that Europe cannot be oriented.
                        We put different meanings into the concept of "competitor". Both NOVATEK and GazProm are state structures. No matter how they are called in the official language. And they complement each other.
                        All companies now have deteriorating financial indicators. And this is due, first of all, with unfavorable conditions. This is the shale of America, and Saudi Arabia, and Qatar, and Australia. And of course, Russia. You might think that highbrow sages sat in Australia or the United States when billions of dollars were pumped into LNG plants, and now they are forced to stop their work.

  • 123 Offline 123
    123 (123) 15 June 2020 18: 44
    According to the source, such impressive debts to the Russian gas corporation will not allow official Ankara in the foreseeable future to make purchases of American liquefied natural gas to reduce dependence on fuel from Russia.

    If, according to the "source", debts to Gazprom are the only obstacle to the transition to American LNG, then it is worthy of oblivion because it is incredibly stupid. I sympathize with the Wall Street Journal readers forced to read such nonsense.
  • Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 15 June 2020 23: 56
    Now these Gazprom will be thrown. And what, the population will pay ...
  • Dear sofa expert. 16 June 2020 00: 49
    I’m confused about this “Turkish gambit” and can’t understand what kind of gas from the USA this article is about?
    The fact that he is LNG is understandable, but what production method is meant? Slate, traditional, or both together?
  • Dust Offline Dust
    Dust (Sergei) 16 June 2020 02: 39
    Lost to Ukraine in court 3 billion dollars. Lost Poland in court 1,5 billion dollars. Big problems with the Power of Siberia ... Lukashenko, the bank of Gazprom squeezed out with 3 billion dollars. Huge problems with the Nord Stream 2. Now the Turks have sent on an erotic journey, they refuse to give 2 billion dollars. And only one Miller, like an unsinkable highlander, rides on a white horse ... And where are these effective managers, the praised Gazprom lawyers !?)
  • The comment was deleted.
  • kriten Offline kriten
    kriten (Vladimir) 16 June 2020 11: 25
    Only political myopia could move Gazprom and VVP to have long-term relations with Turkey. This is a misunderstanding of a simple fact - under any conditions, it will always remain an enemy and will harm. The mere fact that it is one of the main sponsors of world terrorism turns our "friendship" into stupidity on the part of Russia, and a farce and deception on the part of Turkey.