News Code : 45570

Petrotahlil -Russian natural gas producer Gazprom started a landmark auction for the sale of natural gas volumes for delivery into Turkey on Wednesday, the first for the region.

The company tendered 30MWh/h on the ESP platform at a price of $180.00/thousand cubic metres (€14.45/MWh at Tuesday’s exchange rate). The delivery point would be Strandja1-Malkoclar on the Bulgarian-Turkish border for the period 1 December 2020-1 January 2021.

A trader said no volumes were sold in this first auction on Wednesday morning.

A second market participant said the price was higher than what Turkey was paying as part of its long-term oil-indexed price for importing gas, which stood at $173.00/kscm for the fourth quarter of 2020.

A second auction started at around 11:00 London time and was ongoing at the time of publication.

It was unclear how much volume was being auctioned overall.

If the tender is successful and volumes are supplied as stated, the border point at the end of the historical Trans-Balkan pipeline would be a new delivery point added to Gazprom’s ESP platform.

If there are several buyers at the delivery point, the allocation will be performed pro-rata according to their respective nominations, said a trader.

ICIS understands that if buyers fail to off-take volumes, they would have to pay a penalty calculated as the value of the daily contract quantity, times 31, times €0.5/MWh.

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Source : ICIS

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