TURKSTREAM IS WORKING

PLATTS - 19 Oct 2022 - The long-term operation of the TurkStream gas pipeline from Russia has been "secured" following a decision by the Netherlands to return a key export license, Hungarian officials said Oct. 19.

The Netherlands-based operator of TurkStream, South Stream Transport, was forced to reapply to the Dutch authorities for a renewal of an export license, which was withdrawn Sept. 18 after it was judged to be in breach of EU sanctions against Russia.

Hungary -- which is dependent on TurkStream and its associated onshore pipeline infrastructure in Southeast Europe to receive Russian gas -- welcomed the move.

"The operation of TurkStream is now fully secured in the long term following the Dutch decision," foreign minister Peter Szijjarto was quoted as saying by Hungarian government spokesman Zoltan Kovacs.

South Stream Transport confirmed later Oct. 19 that the license had been renewed.

"On Oct. 17, South Stream Transport was informed by the Dutch authorities that the export license had been renewed," the company said.

South Stream Transport had said previously that the TurkStream export license had been "prematurely revoked" and that it had "all legal grounds" to receive an exemption.

That, it said, was because the gas that the pipeline supplies to Europe "participates in ensuring the energy security of Europe".

Szijjarto said that while the permit cancellation would not have affected TurkStream flows in the short term, it was not an encouraging long-term signal.

TurkStream volumes

The two-string TurkStream pipeline was commissioned in January 2020, with the 15.75 Bcm/year Turkish string carrying Russian gas to Turkey and the second string sending gas to Europe via Bulgaria.

The TurkStream string to Southeast Europe has been flowing more than 1 Bcm/month in recent months and in September delivered 1.09 Bcm of gas, according to S&P Global Commodity Insights data.

Countries receiving gas via TurkStream include Greece, Serbia, Hungary, Romania, North Macedonia, and Bosnia and Herzegovina.

Russian gas supplies to Europe via pipeline are now only flowing via TurkStream and via the Sudzha entry point on the border between Russia and Ukraine.

Lower Russian deliveries to Europe have seen European gas prices reach record levels in 2022, though prices have dropped back in recent weeks on healthy storage levels and lower demand.

Platts, part of S&P Global Commodity Insights, assessed the Dutch TTF month-ahead price on Oct. 18 at Eur112.55/MWh ($110/MWh), down from the record high of Eur319.98/MWh in late August.

-----