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    'A New Level' of Cooperation: What's Behind Gazprom Leaving Turkey's Gas Market

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    In an interview with Sputnik, Russian expert Alexey Grivach gave his thoughts on reports about Gazprom's possible withdrawal from the Turkish market.

    The Kommersant daily reported that the Russian state-run gas giant Gazprom may leave Turkey's internal market and focus on direct gas sales to Turkey.

    Gazprombank is currently completing its withdrawal from Promak, a company which owns a 60 percent stake in the two importers of Russian gas to Turkey — Enerco and Avrasya, according to the newspaper.

    Gazprom Deputy Chief Executive Alexander Medvedev said that the company plans to sell another Turkish asset, Bosphorus Gaz.

    He said that the Turkish market is "unpredictable" and that it is becoming less and less attractive due to the weakening of the lira and regulated tariffs. Kommersant sources said that due to this, Bosphorus lost about 100 million euros in 2016.

    Kommersant quoted experts as saying that withdrawing from the Turkish market may strengthen Gazprom's negotiating position in a spat on export prices because the company will no longer have a direct interest in maintaining the profitability of sales within Turkey.

    At the same time, the newspaper said that no final decision on leaving the Turkish market has been made by Gazprom.

    Speaking to Sputnik, Alexey Grivach, Deputy General Director of the National Energy Security Fund, said Gazprom remains the largest gas supplier on the Turkish market.

    "It is important to understand that Gazprom is leaving the gas trading market in Turkey rather than the country's gas supply market. Gazprom remains the largest gas supplier for Turkey, with a share of more than 50 percent," Grivach said.

    "Moreover, this year the volume of supplies to Turkey is growing significantly after a slight decrease. The past five months have completely compensated for the year-on-year decline. This indicates that Russian gas is in high demand and that it remains competitive in Turkey," he added.
    He did not exclude the possibility of developing direct cooperation between Gazprom and Turkish consumers.

    "I think that Gazprom clinching direct contracts with [these] consumers rather than traders is possible," Grivach said, citing direct gas supplies to Turkey's power stations and industrial consumers.

    "This is a transition to a new level and it should, of course, get the go-ahead from Turkish authorities who determine the rules of the game in the country's market," he pointed out.

    In this vein, he suggested that "the new level" can be applied to the implementation of the Turkish Stream gas pipeline project.

    Meanwhile, Gazprom spokesman Sergey Kupriyanov told RIA Novosti that the company is considering various options for cooperation with Turkish gas consumers.

    "We are closely monitoring trends related to the development of the Turkish energy market and are considering a numbre of options for cooperating with Turkish consumers," he said.

    Commenting on reports about Gazprom's possible withdrawal from the Turkish market, Kupriyanov said that "the specific long-term model of the collaboration will adapt to the changing environment of the country's energy market."

    He stressed that the Turkish gas market is of paramount importance to Gazprom and that it remains Russia's second largest in terms of exports.

    "We proceed from the assumption that Turkey's role as the largest energy player in the region will continue to grow in the future. In this connection, we are now developing a new major infrastructure project, the Turkish Stream, which will directly bring large volumes of gas to the country," Kupriyanov said.

    customers, project, market, pipeline, withdrawal, gas, cooperation, Turkish Stream, Gazprom, Turkey, Russia
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