Turkish electricity producers asked to switch to fuel oil amid natural gas deficit

A number of gas-fired power generators in the Turkish northwestern Marmara region have been asked to switch to fuel oil as the country is experiencing an average natural gas deficit of 17 million cubic metres (mcm) per day, ICIS confirmed on Friday.

The generators include state-owned power plants or plants built under private-public partnership Ambarli, Trakya, Uni-Mar which have an estimated combined capacity of 3.5GW. It was unclear how much of their capacity was in operation early Friday afternoon.

At least three private producers with large gas-fired generation in the region said they were running as normal and had not received any curtailment orders by Friday afternoon.

A source active in the market said: “There is low pressure at the city gate of Bursa, but it is still far away from lowest levels of the past (29 Bar). Ovaakca, the biggest gas-fired power plant in Turkey, located in Bursa, is still working at full capacity right now.”

On Friday at 08.00 Istanbul time, the balancing price was pegged at Turkish lira (TL) 243.66/MWh (€87.85/MWh). However, the Day-ahead Baseload price out-turned at TL196.92/MWh on the exchange PMUM, compared to Friday’s Baseload delivery price of TL196.79/MWh.

Around 20MW of wind capacity was in operation on Friday afternoon out of a total installed capacity of 3.5GW. A similar situation was expected for Saturday.

A source at electricity grid operator TEIAS said the available capacity for Friday was 37.6GW and the expected daily consumption 760GWh.

Temperatures next week are expected to remain in line with the monthly average. However, UK-based WSI forecasters say Turkey may expect a cold spell in the second week of December.

ICIS assessed December Baseload on Thursday at TL194.25/MWh.

Turkey is expecting to import additional electricity sourced in Russia via Georgia throughout December. The Georgian system operator GSE allocated 300MW capacity for transit and the energy will be sold on PMUM.

Natural gas issues

A source told ICIS that Turkey’s maximum entry gas volumes have been 170mcm/day for the last two days. Meanwhile, the maximum exit volumes for the country ranged between 185–190mcm/day. He pointed out that BOTAS was trying to cover the deficit from linepack gas.

ICIS understands that BOTAS had 1.81 billion cubic metres (bcm) in storage at Silivri. A source in the private sector said the current storage volumes, including those owned by the private sector, were 2.2bcm as of Friday morning. The information could not be confirmed with BOTAS.

Russian gas flows via the western Malkoclar entry point remain curtailed. A total of 21.5mcm/day entered the country via the point on Thursday. Russian flows via Malkoclar have averaged 22.9mcm/day since the beginning of the month. The contractual daily average on the border should be 42mcm/day.

LNG supplies

Meanwhile, the 145,445 cubic metre (cbm) contract LNG vessel Lalla Fatma N’Soumer from Algeria was expected to unload at Marmara on Saturday, according to shipping information. The 155,000cbm spot LNG cargo Arctic Aurora bought by BOTAS from Statoil had discharged at Aliaga on 27 November, according to shipping information.

A source said all the LNG capacity at the BOTAS–owned Marmara terminal and the EGE Gaz Aliaga terminal had been booked until February.

BOTAS has sourced at least nine cargoes from Qatar to be delivered between December to March 2015 in addition to its usual contractual volumes from Algeria and Nigeria. If the two terminals are fully booked until February, Turkey will not be able to take advantage of spare volumes currently available in the Mediterranean basin.

Mediterranean availabilities

There are currently at least four cargoes in the Mediterranean basin that may be free for delivery, according to ICIS estimates. These include the 142,759cbm Arctic Voyager, the 145,057cbm Arctic Princess, both from Statoil and have recently loaded from Snohvit. Another two vessels are Spain’s Gas Natural Fenosa 135,358cbm Excellence, and GDF SUEZ’s 153,500cbm Provalys.

Spain is facing an LNG oversupply. The latest December schedule shows that out of nine reloads initially planned for December, now only four are likely to go ahead, possibly because they were sold earlier in the year.

The current in-tank price range for the first half of December lifting from tanks ranges between $9.00/MMBtu (€24.57/MWh) to $9.80/MMBtu (€26.76/MWh). Fixed third-party costs of reloading may add approximately $0.40/MMBtu (€1.00/MWh) to the transaction. Sources active on the Spanish market say even fixed third-party access costs may become negotiable, given the market’s interest to sell the volumes.

December spot LNG prices in the Mediterranean basin are reported below $10.00/MMBTu (€27.30/MWh). Greece’s M&M has recently received a partial delivery from the 125,000cbm Wilgas. The seller was understood to be the UK’s Centrica. Sources active in the LNG market told ICIS that the Greek incumbent DEPA was unlikely to bid higher than $9.10/MMBTu in January and February while independent gas buyers could be bidding even lower.

LNG prices may become attractive to Turkey’s private LNG licence holders if they drop below $9.50/MMBTu, the regulated BOTAS price for eligible consumers. Aura Sabadus, Ludovic Aldersley and Rob Songer