Caspian Report - Issue: 07 - Spring 2014

Aura Sabadus
40
player by selling volumes at cheaper
prices to Turkey and Europe. However,
its present insistence on retaining
a high export price to Turkey
– its largest gas market – casts
doubts over its willingness to grant
discounts in the future.
Another competitor that may
emerge in the region is the US
through the export of LNG. Countries
such as Greece and Hungary
have been lobbying Washington for
volumes once they become available
towards the end of the decade. Even
though Turkey has not expressed
interest, the competitive price expected
to be charged for exports to
Europe may be attractive enough for
private licence-holders to enter the
market. Under current conditions –
high international LNG prices – and a
capped regulated price, Turkish private
companies cannot afford to purchase
LNG. Greece itself may find the
US LNG price attractive, compared to
that, say, of Russian gas even now after
Gazprom granted a 15% discount
backtracked to June 2013.
Prices to various European countries
expecting to import US LNG will vary.
However, news and price publishers
ICIS estimate that depending on
the shipping distance, landing prices
into Europe could hover between
$10.00 - $12.00/MMBTu based on a
US Energy Information Administration
(EIA) projected Henry Hub average
for 2015 at $4.11/MMBTu. 14
At an average $11.00/MMBTu
($395.00/1000m 3 ) US LNG could be
reportedly $2.00/1000m3 15 cheaper
than the currently discounted Russian
border price for Greece.
However, Russian gas prices to European
markets either through existing
contracts, or as part of future
agreements signed after the comple-
14.
“Focus: Eastern Europe warms to US LNG (27 February 2014), Global LNG Markets (GLM), ICIS.
15.
“Greece’s DEPA secures 15% discount from Gazprom,” (26 February 2014), European Spot Gas
Markets (ESGM), ICIS.