What Now, Blue Stream?

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What Now, Blue Stream?

Mon, 07/13/2020 - 14:43
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Beregovaya compressor station, Blue Stream gas pipeline (copyright by Gazprom)
Beregovaya compressor station, Blue Stream gas pipeline (copyright by Gazprom)

The fraying relationship between Ankara and Moscow has had a negative impact on the reopening of the Blue Stream gas pipeline. Scheduled to resume operations this month, the world's deepest pipeline of 1,213-km running along the floor of the Black Sea has remained idle, as Ankara increases LNG shipments from the United States and pipelined gas (Turkstream) from Azerbaijan to replace the more expensive fuel from Russia.

"There is no point in using both pipelines if only one (TurkStream) is more than enough," a Russian source said. TurkStream is currently running one of its two lines with 15.75 bcm in annual capacity.

According to these sources, Gazprom has declined a request to respond when asked when Blue Stream is set to be re-launched. "Gas supplies to Turkey are carried out in line with requests from the importing companies. Contracts are signed under the 'take or pay' principle," it said.

There has also been no comment regarding potential penalties the Turkish company Botas would pay for Blue Stream's suspension and lack of offloads.

While reducing Russian pipeline gas imports, Turkey plans to buy at least one third of its needs this year in the form of LNG, with cargoes coming from the United States, Nigeria, Algeria, Qatar and also Russia.

Russia was Turkey's top gas supplier in March last year but as its sales dropped as much as 72% it now ranks as the fourth-biggest supplier, according to Turkey's Energy Market Regulatory Authority.

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