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    Gazprom Sells out of Turkish Company

Summary

The falling lira is making life tough for foreign investors

by: Dalga Khatinoglu

Posted in:

Natural Gas & LNG News, Europe, Corporate, Mergers & Acquisitions, News By Country, Turkey

Gazprom Sells out of Turkish Company

Russian gas exporter Gazprom has sold its 71% stake in Bosphorus Gaz to the local Sen Group, which is already owns the other 29%, the Turkish gas distributor announced October 1. Bosphorus Gaz imported 2.75bn m3 of Russian gas, or 5% of the country’s imports, in 2017.

Neither company explained the reason for the sale but Gazprom's deputy chairman, Alexander Medvedev, said June 2017 that the company was losing interest as Turkish lira was weakening: it has lost 37% of its value against the US dollar this year.

Gazprom is not alone: OMV completed the sale of its Turkish power plant a month ago, while Germany's EWE has signalled it would like to sell gas distribution assets in two key Turkish cities.

The country almost wholly depends on abroad, importing about 29.59bn m3 in the first seven months of 2018, about 7.45% less than it did in the same period last year. It also consumed 29.49bn m3 and re-exported about 325mn m3 to Greece, according to the latest monthly report of Turkish regulator Emra, published October 1.

Quoting energy industry sources, Reuters reported that state-run Botas has raised natural gas prices by 9% for residential users and 18.5% for industrial users, the third hike in as many months, as the value of the lire slips. Botas had already raised prices by 9% for households and 14% for the industrial sector in August and September. Part of the price hike is due to rising oil prices on world markets as well. The Brent crude benchmark, to which Turkey's long-term gas import contracts are indexed, hit $83/barrel October 1, the highest price in the last four years, and it pays for imports in dollars.