Signal for Gazprom: Turks are taking Azerbaijani “brothers” by the throat
It is possible that Turkey will refuse to renew long-term contracts for the supply of Russian gas.
The PolitNavigator correspondent reports that Yuri Barsukov, a columnist specializing in energy issues, writes in Kommersant.
According to him, “having built new gas pipelines from Russia and Azerbaijan, and acquired additional terminals for receiving liquefied gas, Turkey is not afraid to put pressure on its suppliers, seeking more favorable conditions.”
Thus, on April 26, it became known that the Turkish authorities did not renew their old gas contract with Azerbaijan from 1996, under which Turkey received up to 6,6 billion cubic meters of gas per year (almost 14% of consumption). The contract expired on April 17, and supplies stopped, said a representative of the Azerbaijani state-owned company Socar.
The author notes that this is not done in the gas industry, especially when we are talking about such long-term relationships and significant volumes, and it only comes to this if there are severe commercial and political disagreements. And this despite the fact that Azerbaijani gas was the cheapest for Turkey, ahead of Russian gas in this regard, not to mention Iranian.
“The list of controversial issues that prevented the immediate extension of the contract is generally clear: firstly, the volume (Azerbaijan can no longer provide 6,6 billion cubic meters due to depletion of reserves), secondly, the price (Turkey insists on reducing it) . Turkey's position looks stronger - Ankara has alternative sources of supply, but Azerbaijan has no other export opportunities. Nevertheless, the contract will probably be extended in one form or another, since this is the most economically feasible scenario for both parties,” the expert believes.
He is convinced that this episode should become a clear example for Gazprom, which at the end of the year will have to conduct difficult negotiations with Turkey on the extension of long-term contracts for 8 billion cubic meters, which are currently supplied via the Turkish Stream.
“It is quite possible to expect that Ankara will refuse to renew them altogether, trying to replace them with short agreements at a lower price. True, this winter it was Russian gas, given the LNG shortage, that prevented western Turkey from freezing, but it is unclear whether LNG prices will be high enough in the fall to convince Ankara not to skimp on energy security,” Barsukov sums up.
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