Public Joint Stock Gazprom: Balkan Stream countries hope to avoid worst of international gas crisis

As the debate rages on Nord Stream 2 gas pipeline, a separate gas pipeline system transporting Russian gas to South Eastern Europe has quietly opened up in recent years, and now allows countries along its route to avoid the worst of the energy crisis.

As North Steam and Nord Stream 2, Balkan Stream, an extension of Gazprom’s Turkish Stream gas pipeline through South Eastern Europe To Hungary, bypass Ukraine. Yet compared to its northern counterpart which has sparked international debate and criticism from Russian gas diplomacy, Balkan Stream has drawn relatively little comment.

Balkan Stream is an extension of Turkish Stream (or TurkStream) which extends from Russia under the Black Sea To Turkey. It has a capacity of 31.5 billion cubic meters (bcm) of gas per year, part of which is destined for several countries in South-Eastern Europe.

Road links in many countries which would have been served by the aborted South Stream project which would have delivered Russian gas to Bulgaria then in other countries in the region, but was dropped when it was found not to comply with EU law. As pointed out Russia hawks, the two pipelines are eerily similar and questions have been raised about funding for the various stages of the Balkan Stream.

With the rise in international gas prices, state government officials located along the pipeline network, which have recently connected in Croatia and Hungary – sought to reassure their populations that they will not be faced with gas shortages or exorbitant price increases.

As bne IntelliNews reported the crisis of Europe was caused by a “V” shaped market; a combination of factors, including the reopening of industrial capacity as the corona crisis subsides, a harsh winter and hot summer, accidents in supply infrastructure and increased demand for liquefied natural gas (LNG) from Asia. While Russia has been blamed in some quarters for the crisis, such as bne IntelliNews journalist Marc Galeotti argues, Moscow has fulfilled its contractual commitments and is delivering gas levels close to record levels.

Diversified supply

In addition to Turk Stream, Turkey has several other import options, as stated by the Minister of Energy and Natural Resources Fatih Donmez to October 8, when he predicted that the country would not face energy shortages this winter. This despite an expected increase in consumption this year as the economy recovers and the recent drought has reduced hydropower production.

“We have pipelines from Black Sea, the Blue Stream, another of Azerbaijan and a pipeline of Iran. We added two floating LNG [liquefied natural gas] terminals, called FSRUs [floating storage and regasification units]”Donmez told the private broadcaster TVN. He also noted that the country has increased its underground storage capacity.

Of Turkey, Balkan Stream is heading towards Bulgaria where, despite the Energy and Water Regulatory Commission (KEVR) recently approving increases in the price of natural gas, the country still expects users to pay a relatively low price, thanks to Bulgaria’s gas supply from Gazprom and Azerbaijan Socar. Specifically, Bulgaria has the ability to increase the gas it imports Azerbaijan, CEO of Bulgargaz Nikolai Pavlov said according to Reuters.

Meanwhile, the Russian Ambassador to Bulgaria Elena Mitrofanova proposed that Bulgaria sign a new long-term gas supply contract with Gazprom amid rising spot prices, said Mitrofanova, reported by RIA Novosti.

Cheap gas in Serbia

Gas began to flow to the two Serbia and Bosnia the Republika Srpska of Herzegovina earlier this year – along with Turkish Stream came online which saw Russian deliveries of gas to Turkey increase by 200% year-on-year. Serbian President Aleksanda Vucic recently adopted an optimistic tone, promising citizens “the cheapest gasoline in the world. Europeand houses warm enough to walk around in a t-shirt this winter.

Vucic told local media on October 8 that Serbian citizens do not have to worry about gas or electricity supply and that prices will not rise. “Serbian citizens will have warm rooms so they can walk around in T-shirts. There are no problems, we do not even intend to increase the price of gas and electricity, we can support everything if we increase the capacities of the electricity system ”, he said. said, TV N1 reported.

Say he will personally ask his Russian counterpart Vladimir Poutine to help Serbia Through the energy crisis, Vucic blamed the energy crisis in Europe on European countries that have not signed long-term agreements with Russia, reported TASS.

He called from serbia decision to build the “very smart” Balkan Stream gas pipeline, claiming that it supplies the country with affordable natural gas.

Anger over Gazprom deal in Hungary Ukraine

Of Serbia, the pipeline continues to Hungary, and the interconnection between the two countries was officially opened on September 30. The first commercial deliveries of gas to Hungary by the line started the next day, the first day of the new gas year and the day Hungary new long-term gas delivery contract with Russia Entered into force.

The exasperated affair Kiev because that’s exactly what Ukraine feared: previously the gas delivered to Hungary of Russia went through Ukraine, but now it has been completely cut from the loop.

The Ukrainian national gas company Naftogaz and the pipeline operator Gas Transmission System Operator of Ukraine (GTSOU) claimed on October 1st that the agreement of the Russian Gazprom to supply Hungary and reduce gas supplies to Ukraine was “the use of gas as a weapon”, and called on the US and the EU to impose sanctions as promised.

“Whether Germany recognizes it or not, Russia aimed its energy weapon at the whole of the EU. Threats to punish Russia at a future date are no longer sufficient. The very credibility of Western deterrents is at stake and now is the time to react, ”Ukraine’s national gas transport company said in a tweet from its corporate account the same day.

Under the terms of the agreement, Gazprom will deliver 3.5 Gm3 of the 4.5 Gm3 of gas it obtains Russia annually as part of the contract via the Hungarian-Serbian interconnector. The total annual delivery capacity of the pipeline is 8.5 billion cubic meters. 32% of the first year’s offer has already been booked.

Ukraine complained to European Commission In regards to Hungary new Russian gas contract; previously Hungary Russian gas was delivered through the Friendship gas pipeline passing through Ukraine. However, this was overlooked by the Hungarian Foreign Minister Peter Szijjarto who said Hungary considers this decision as an “attack on its sovereignty”.

“Or Ukraine nor any other country has business with whom, on what and in what manner Hungary concluded agreements, ”he added.

Croatia started supplying gas via the pipeline the same day, after four years earlier, in September 2017, he signed a 10-year gas delivery contract with Gazprom, under which the Russian company will deliver 1 billion m3 per year to Croatian Prvo Plinarsko Društvo.

Left out of flow

Other countries in the region, especially those without long-term supply agreements, are struggling.

Moldova, for example, has not yet accepted a new long-term contract with Russia after expiry of the previous long-term contract on September 30. The country’s natural gas transmission system and power generation sector have come under extreme pressure after Gazprom agreed to temporarily deliver just two-thirds of the gas the country is negotiating a new multi-year contract for.

moldova Commission for Exceptional Situations (CSE) declared the state of alert relating to the natural gas market on October 13 and the government mandated the country’s centralized electricity supply company, Energocom, to negotiate natural gas imports from Ukraine and Romania, Deputy Prime Minister Andrei Spinu announcement.

Romania came to the rescue a week later, began limited gas exports to Moldova, Moldovan Prime Minister Natalia Gavrilita announced at a press conference on the state of alert triggered by the crisis in the market natural gas.

The negotiation of the new contract with Gazprom was the first major test for the new western-leaning government led by the Moldovan president Maia sandu, who was elected earlier this year on a pro-Western, anti-corruption platform.

As part of the bridging deal with Gazprom, as talks on a new long-term contract continue, valid for October only, Moldova receives 54 million cubic meters of gas, which is only 67% of the 80 million cubic meters that the country, not counting the separatist Transnistria, needs, announced the Moldovan natural gas transport and distribution company Moldovagaz, controlled by Gazprom, with the State as the main shareholder.

The drop in supplies below consumption has led to a drop in pressure in the gas transmission system, the company said.

In addition, the price paid by Moldova in October will be $ 790 per 1,000 cubic meters – six times more than in the first quarter of this year.

Moldovagaz urged its consumers to take measures to reduce their consumption, in particular by moving towards alternative resources (such as heating oil) or by postponing industrial operations such as the refining of sugar beet.

Moldova’s main power generation unit, controlled by separatists in Transdniestria and usually burning natural gas (which it doesn’t pay for), partly burns coal these days. The smallest units, on the Moldova own territory (Termoelectrica and CET Nord) are planning to switch to fuel oil, but such a development takes time.

Officials from Chisinau are supposed to have appealed to both Moscow and Brussels support to help Europe’s poorest country get through the energy crisis.

At the same time, the states of the region are diversifying their gas supply routes, thereby reducing their dependence on Russia as a supplier. The same day as Serbia opened its section of Balkan Stream, Bulgaria started to receive gas from Azerbaijan via the transadriatic pipeline which also crosses Greece and Albania before crossing the Adriatic for Italy. Also at the turn of the year, Croatia commissioned its floating liquefied gas (LNG) terminal near the island of Krk. In addition to diversifying its own sources, Croatia also aims to become a hub for the distribution of LNG in the region. Romania also seeks to establish itself as a supplier to the region, once new capacities in the offshore Black Sea comes online.

© 2021 bne IntelliNews, source Magazine

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