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Turkey may find its imported gas glut costly

Friday, October 5, 2018

Subject

The apparent mismanagement of Turkish gas imports.

Significance

Take-or-pay contracts may force state and private gas importers to pay for gas they cannot sell; seven private firms could go bankrupt. The root cause is political interference in Turkey's nascent liberalised gas market.

Impacts

  • No details of a rumoured deal have emerged from the Turkish-Russian summit in Sochi -- particularly on what it may cost Turkey.
  • The take-or-pay issue will affect other gas suppliers such as Azerbaijan, which in July began exporting under a second contract.
  • Continuing gas oversupply could affect the development of Turkey's domestic coal and renewables.

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