European politicians may be preaching a move away from Russian gas, but the data paints a different picture: In July, Russian gas exports to Europe via pipeline rose to their highest level since the Nord Stream shutdown in August 2022.
According to Energy Intelligence calculations, based on data on gas transportation, in July Gazprom delivered Russian state concentrate to Europe (excluding Turkey) about 2.7 billion cubic meters m, which is 34% more than in June.
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However, despite the explosive growth, the total volume of shipments is still 32% less than in July 2022when Gazprom continued to supply gas via Nord Stream to Germany, albeit in very limited volumes. At the end of August, Gazprom stopped deliveries via Nord Stream and continued to use only two routes – Ukrainian transit and the Turkish Stream gas pipeline. After the sabotage and explosion of the Nord Stream, gas pumping through it was completely stopped.
In July, exports reached an 11-month high, mainly due to a sharp increase in Turkish Stream deliveries to Southern and Eastern Europe.
What caused the increase in supplies
According to Energy Intelligence, the increase in supplies was mainly due to the reduction in Gazprom’s contract prices linked to the hub and the prolonged heat wave, which led to an increase in demand for cooling in southern and central Europe. Prices pegged to Gazprom’s hub continued their downward trend in previous months. Despite increased demand from the heat wave, spot prices rose marginally, but closing the gap between spot prices and Gazprom’s price cuts made Russian gas deliveries more attractive to buyers than in previous months.
Turkish Stream stimulates growth
In recent months, Turkish Stream flows to Europe have proven more vulnerable to price and demand fluctuations than Ukrainian transit, which provides supplies to a limited number of markets in Central Europe and Italy.
Russian gas flows through Ukraine* increased by 3.9% in July compared to the previous month, but decreased by 0.2% compared to the previous year and amounted to 1.3 billion m3. At the same time, exports through the Turkish Stream to Europe increased by 82% on a monthly basis and by 5% on an annual basis, and amounted to about 1.4 billion m3.
Leading Greece and Hungary
In July, Turkish Stream flows increased primarily in Hungary and Greece – by 67% on a monthly basis, up to about 620 million cubic meters. m, and by 94%, up to 190 million cubic meters. m, respectively.
According to Energy Intelligence, the explosive growth in Greece is due to a change in the price environment, which prompted the country to take more Russian gas. Earlier this year and in May, when the gap between Gazprom’s prices and spot prices was more significant, Greece preferred to take gas from the reverse LNG terminal in Bulgaria, which meant zero gas flow through the Turkish Stream from Bulgaria to Greece.
It is assumed that most of the phased imports of Hungary will be sent to Ukraine for storage. In July, Hungary shipped 224 million cubic meters to Ukraine. m of gas compared to 60 million cubic meters. m in June, the operator of the Ukrainian gas transmission system announced on August 2. It is worth noting that, according to Ukrainian sources, this gas, after it “visited” Hungary, is already considered “purely European, not Russian” and is used for domestic consumption.
Turkish Stream pumps are operating at full capacity.
In July, Turkish Stream operated 7% above its normal capacity of 15.75 billion cubic meters. m / year .. And on July 14 it reached a record high of 50.44 million cubic meters. m / day, which is 17% higher than the throughput, slightly exceeding the previous record of 50.42 million cubic meters. m/d, set on March 1, 2022, five days after Russia’s invasion of Ukraine, which caused spot prices to rise and encouraged buyers to take as much Russian gas as possible, fearing possible disruptions in supplies due to the war.
On August 1, the Turkish Stream flow to Europe set a new record – 50.9 million cubic meters. m/day, according to transportation data.
The amount that Turkey earns from pumping Russian gas was not disclosed, however, given the peculiarity of the moment, it is likely to be significantly higher than the tariffs set by Ukraine. So we are talking about billions of euros a year. For Turkey, which has a difficult economic situation, this is very serious money.
Russian LNG turned to Asia
While pipeline gas exports rose, Russian LNG exports to Europe fell 18% in July to 950,000 metric tons as the Yamal field, owned by private company Novatek, boosted shipments to Asia via the Northern sea, according to Kpler.
Yamal shipped 880,000 tons to Europe last month, up from 1.03 million tons in June, while its exports to Asia rose to 650,000 tons from 370,000 tons.
American LNG, “ay”
And what about the American LNG, the terminal for receiving which with such fanfare represented last year by Prime Minister Kyriakos Mitsotakis? It is not closed, but gas carriers (at least from the USA) have not been observed in its vicinity for quite a long time. The same is the case with construction new terminal in Alexandroupolis.
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