Russia sold 28.69 billion m3 of gas to Turkey in 2017, representing a 52% share of the country's gas import basket. Moscow exported 23.64 billion m3 of gas to Turkey in 2018, marking a 47% share of Ankara's total gas imports.
However, in 2019 this share decreased to 33%. Turkey imported 45.21 billion m3 of gas in 2019 out of which Russia supplied 15.19 billion m3.
According to experts, gas prices dropped with increased competition and the abundance of supplies on the global market. LNG has become even more popular with consumer countries as natural gas in the spot LNG market is cheaper than prices set in long-term contracts.
Many experts believe that with the filling up of gas storage amid large LNG volumes from Qatar and the sharp decline in demand due to the pandemic, there is more possibility of gas prices in European markets dropping below zero.
As of June 2, gas storage capacities in Europe were 73.34% full compared to 60% a year ago, according to the data from the Association of Gas Storage Europe (GSE).
Turkey's state-owned Botas signed a deal to buy 1.2 million tonnes of LNG from French Total. The deal between the 2 sides will start in late 2020 and will run for 3 years. The agreement can be seen as part of Turkey’s efforts to increase the share of hub-indexed LNG in energy imports.
Botas increased spot LNG purchases when global LNG prices reduced. Turkey's spot LNG imports amounted to 3.8 million tonnes in the Q1 of 2020 compared to 2.3 million tonnes for the Q1 of 2019.
Botas' spot LNG agreements will be based on hub-linked prices instead of the oil-indexed pricing mechanism of the expiring contracts.
Author: Murat Temizer
