ANKARA: Gazprom Export said in a statement to ICIS: “The negotiations with Gazprom Export and independent consumers in Turkey continue in a constructive mode. The results of negotiations will be announced after they are completed. We are interested in maintaining the stable contractual relations with our Turkish partners.” Turkish electricity prices have shot up dramatically within Thursday’s session amid market panic over gas supplies into Turkey.
March Baseload jumped 11% on the financial electricity screen (VIOP) of the Borsa Istanbul, starting the session at Turkish lira (TL) 114.00/MWh and soaring to TL126.00/MWh by late afternoon. The front month was the most volatile, but other curve values, including April, and the half-yearly baseload product rallied throughout the session.
Prices on VIOP have moved extensively throughout the week, gaining TL10.00/MWh within a few hours on Tuesday. On the over-the-counter market, prices were comparatively less volatile on Thursday, trading at TL119.00/MWh on a broker screen, TL2.00/MWh up on the previous day’s closing session.
The product was also quoted up later in the session, being bid at TL120.00/MWh and offered at TL137.00/MWh on a broker screen. “No one is trading on the physical market because people are scared,” a trader said. “I have never seen anything like this in my whole life,” he added.
Prices shot up amid a trickle of news this week that gas-fired capacity could be cut in March. Unconfirmed reports this week suggested that some gas-fired capacity could be ramped down in March, although neither state-owned nor private plants have made an official statement. This culminated with further news on Thursday afternoon that Russia’s Gazprom had reduced gas supplies to Turkey amid a dispute over the price of natural gas to the country.
Two Turkish shippers interviewed by ICIS said the reduction in gas supplies was linked to a dispute over a discount on Russian gas, which Gazprom reportedly sought to remove.
Gazprom Export said in a statement to ICIS: “The negotiations with Gazprom Export and independent consumers in Turkey continue in a constructive mode. The results of negotiations will be announced after they are completed. We are interested in maintaining the stable contractual relations with our Turkish partners.” Two other shippers rebuffed the claims, pointing out the reduction was linked to softer demand in the country, rather than on political grounds.
Gas supplies at the western Malkoclar entry point have been reduced by about a third since 11 February, hovering around 27.8mcm/day. Before 11 February they had been at the usual contractual volumes at the border are typically 41-42mcm/day. However, demand has been low in recent days as Turkey is basking in mild temperatures.
A shipper said consumption was hovering between 120-150mcm/day, although the information could not be confirmed. The transmission capacity of the gas system is 190mcm/day. A 154,500 cubic metre (cbm) spot LNG cargo from Norway and a 129,7000cbm contractual cargo from Algeria are due to arrive in Turkey on Friday, boosting supplies further, according to ICIS LNG Edge.
