Is “TANAP” risk for “Gazprom”?

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The TRANS-Anatolian gas pipeline (“TANAP”) will soon become operational. The Grand opening is scheduled for June 12. It the hydrocarbon raw materials from Azerbaijani fields will be delivered to Turkey and Europe. First gas supplies through the pipeline will begin June 30. Perhaps in the future the supplies will be joined by major exporters such as Iran and Turkmenistan.
But seriously, fear of competition “to Gazprom” while is hardly worth it. The Russian gas giant should worry more significant risks – potential problems with the Ukrainian transit and the likelihood of American LNG in Europe. Supplies from Azerbaijan will not impact seriously on the energy balance of the European Union. Its needs are estimated at approximately 530 billion cubic meters of gas per year. Baku is planning at first to put on the “TANAP” in Europe with 10 billion cubic meters of natural gas per year, and 6 billion cubic meters will be exported to the Turkish market.
In 2017, natural gas consumption in Turkey amounted to 53.5 billion cubic meters of fuel. The Turkish gas market is attractive enough, as due to the General growth of the economy and through the development of gas generation. It should also be said that when the projected Gazprom “Turkish stream and TANAP” is already implemented. And, accordingly, were taken into account in the planning of the Russian gas pipeline. There is a very positive political moment. Turkey is gradually becoming quite significant geopolitical player, a serious gas hub, and is interested in realization of both projects.
In conclusion, we should say that “Gazprom” remains probably the most cheap of the energy group in the world. His business is comparable in size with Saudi Aramco, the Saudi company is soon going to conduct IPO and estimated itself in $2 trillion. “Gazprom” the stock market is estimated at 35 times cheaper. Us sanctions, as well as the above mentioned risks of transit through Ukraine and the partial loss of the European market make themselves felt. If to speak about financial results of the Russian gas holding, the best by far is found. Gas prices follow oil prices with a lag of 6-9 months.
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Alexander Razuvayev,
The Director of analytical Department,
Alpari