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Gazprom ready to cover growing Europe deficit in gas using shortest route through Turkey

June 09, 2015, 15:14 UTC+3 MOSCOW
By 2025, deficit in Europe will reach 80 bln cubic meters due to falling natural gas production, Gazprom Deputy Chairman Alexander Medvedev said
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© ITAR-TASS/Stanislav Krasilnikov

MOSCOW, June 9. /TASS/. Europe may face deficit of gas imports of a total of 50 bln cubic meters in 2025, Gazprom Deputy Chairman Alexander Medvedev said Monday.

By 2025, deficit in Europe will reach 80 bln cubic meters due to falling natural gas production while "Washington dreamers will hardly be able" to supply more than 50 bln cubic meters of gas to Europe per year, Medvedev said, adding that around 50 bln cubic meters are the import deficit which has no contracts and transport routes for supplying gas to Europe.

Thus, an imports shortage with no contracts and transport routes for gas supplies to Europe amounts to roughly 50 bln cubic meters.

Gazprom exports may reach 154-155 bln cubic meters of gas in 2015, the company’s Deputy Chairman Alexander Medvedev said Tuesday. This forecast may be made on the basis of gas export dynamics since the start of the year, Medvedev added.

Path through Turkish coast is shorter for Russian gas transit to Europe

Medvedev noted that there are not any risks for construction of the first line of the Turkish Stream. "No doubt here," he said, adding that gas will be supplied to Turkey via the first line.

According to Medvedev, The first line of the Turkish Stream natural gas pipeline project may provisionally cost 3.3 bln euro. The figure is tentative and based on the cost of the South Stream gas pipeline providing for construction of the pipeline to Bulgaria, he said.

As TASS reported earlier, the sea part of the South Stream project is estimated at 13.2 bln euro.

A commercial agreement on natural gas supplies with Turkey’s Botas is planned to be signed by the end of June, Medvedev said. "We are speaking only about Botas so far," he added.

Medvedev associated the signing of the intergovernmental agreement between Russia and Turkey on gas supplies with establishment of the new Turkey’s government after elections. "Let the government be formed at first," he added.

As TASS reported earlier, Gazprom and Botas signed an agreement on increase of Russian gas deliveries to Turkey on December 1. Furthermore, Gazprom granted a discount to Turkey’s gas importers, including Bosporus Gas and Shell, after painstaking talks.

Answering the question about why the delivery point on the border of Turkey and Greece is better than the border with Ukraine, Medvedev said that it is "closer to the market". At the same time Medvedev added that there are yet no negotiations on transferring point for gas to the Turkish/Greek border.

However, "after the transit contract with Ukraine ends it will not be extended, nor the new one will be concluded, under any circumstances", Medvedev said.

Gazprom said it had already held talks with Serbia on continuing the land part of "the Turkish stream", Medvedev said. According to him, in late May Gazprom held relevant talks during the visit to Belgrade.

"And what do you think - we were just drinking plum brandy?" he said, answering a question about whether the company held negotiations in Serbia on continuing "the Turkish stream."

Price of Russian gas for Ukraine reducing

Undiscounted gas price for Ukraine will total $287 per 1,000 cubic meters in the Q3 of 2015, Medvedev said. In the Q4 the undiscounted price will stand at $262.5 per 1,000 cubic meters, he added.

Thus, the average gas price to non-CIS countries in 2014 totals $201.6. The price amounted to $172.7 in 2013.

As TASS reported earlier gas price for Ukraine stands at $247.18 per 1,000 cubic meters till the end of June, which implies a $100 export duty discount granted by the Russian Government. The discount equals to 30% at gas price below $330 per 1,000 cubic meters.

Gazprom still believes natural gas supplies to Donetsk and Lugansk People’s Republics should be paid by Naftogaz of Ukraine. According to Medvedev, "it is logical" because Donetsk and Lugansk are parts of Ukraine.

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