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LNG Squeezes Turk Stream Gas Out of Greece

Copyright © 2021 Energy Intelligence Group

Fresh LNG import cargoes have displaced Turk Stream pipeline gas, from Russia’s Gazprom, in Greece over the past week, gas transmission data shows. What’s even more unpleasant for Gazprom is that the Yamal LNG project of compatriot Novatek has helped squeeze out the pipeline gas. Gazprom’s Turk Stream twin-pipeline, launched in the beginning of this year, is designed to supply 15.75 billion cubic meters per year to Turkey and 15.75 Bcm/yr further to Europe. From Turkey, Turk Stream gas flows to Bulgaria, from where it now only reaches Greece and North Macedonia, although Gazprom wants to also supply Serbia, Hungary and Austria’s Baumgarten gas hub when Turk Stream’s onshore link is fully ready. The Bulgarian gas transmission system operator’s data show that Turk Stream gas flows via the Strandzha 2 entry point dropped by nearly 50% to around 8 million cubic meters per day in Oct. 13-15 from more than 16 MMcm/yr in previous days and only recovered to around 12.5 MMcm/d as of Oct. 19. At the same time, flows from Bulgaria to Greece via the Kulata exit point dropped to zero in Oct. 13-15 from some 8 MMcm/d normally and were below 3 MMcm/d in Oct. 16-19, which suggests it was Greece, not Bulgaria, who slashed Turk Stream gas imports. North Macedonia imports only marginal volumes. In Greece, flows from the LNG import terminal in Revithoussa into the country’s gas grid jumped to 11 MMcm/d-16 MMcm/d in Oct.13-16 from around 4 MMcm/d previously and were around 9 MMcm/d in Oct. 17-19, meaning that regasified LNG displaced Russian pipeline gas in the Greek gas grid. Gas is understood to have been sent out from Revithoussa storage tanks into the grid to make room for a cargo delivered on board the Global Energy tanker from Cheniere’s Corpus Christi LNG plant in the US on Oct. 17, according to ship tracking data. Before that the tanks were filled in early October when a cargo was delivered on Oct. 5 on board LNG Merak tanker from the Yamal LNG project. That means that Gazprom’s Turk Stream gas, ironically enough, was displaced in Greece by regasified Russian LNG. Gazprom often criticizes Novatek for creating unnecessary competition to its pipeline gas in Europe and insists that this harms the country’s budget, which gets a 30% export duty from pipeline gas export and nothing from LNG exports. The Kremlin prefers to turn a blind eye on this pipeline gas/LNG competition, as it sees Novatek’s LNG expansion projects as key to its plans to increase gas exports as much as possible and develop transportation in the Arctic (LNGI Oct.12'20). The situation is additionally unpleasant for Gazprom because the Turk Stream pipeline has been severely underutilized since its start-up, prompting Gazprom to look for new clients in the Balkans (LNGI Jun.2'20). Since the start of the year, Turk Stream’s onshore link to Bulgaria has only supplied 4.41 Bcm, or 15.05 MMcm/d, which represents a 35% utilization rate for the 15.75 Bcm/yr line designed for European supplies. Gazprom doesn’t reveal its monthly or daily flows to non-EU Turkey, but the other Turk Stream line designed for Turkey’s consumption is understood to also operate well below capacity. In the first half of the year, Gazprom exported 4.7 Bcm to Turkey, down 42% on the year, keeping not only Turk Stream but also the 16 Bcm/yr Blue Stream pipeline underutilized. Gazprom is losing competition to LNG and Azeri gas in Turkey. Ankara is moving on with import diversification efforts and wants to reduce dependence on imports in the future with the help of the newly discovered field in the Black Sea (LNGI Oct.19'20). Vitaly Sokolov, Moscow

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