Turkey Pays Record LNG Prices as Iran Cuts Supplies, FACTS Says
Turkey is paying record prices for individual or spot liquefied natural gas cargoes after Iran slashed exports through a natural gas pipeline, according to energy consultant FACTS Inc.
The country is paying between $17 and $18 per million British thermal units for LNG, natural gas chilled for transport by tankers, for immediate delivery this month, Siamak Adibi, a FACTS analyst, said in a report dated February, without elaborating. The price is more than double the U.S. benchmark at Henry Hub, Louisiana.
Iran halted gas exports to Turkey after record low temperatures boosted domestic demand, Facts said. Iran faces delays in developing the Pars gas area, the largest single natural gas deposit in the world, because of U.S.-led sanctions and a lack of technology and capital.
''Turkey will have a serious gas shortage if the Iranian supplies are not resumed,'' Adibi said in the report. ''The exports were reduced to 140-180 million cubic feet a day late last year and cut to zero in the first week of January 2008.''
Turkey has a contract for 970 million cubic feet a day from Iran, the report said. Iran, which started supplies in 2001, exported 595 million cubic feet a day last year, Turkey's state pipeline operator Botas said on its Web site.
Consumption of gas in Turkey rose by 15 percent in 2007 to 35 billion cubic meters of gas, or 3.4 billion cubic feet a day, according to the Web site.
Warmer weather in the past few days has enabled Iran to restart gas exports to Turkey at the rate of 71 million cubic feet a day, Adibi said by phone today.
The gas was made available after residential consumption in Iran declined as the cold weather moderated.
LNG is natural gas chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 258 degrees Fahrenheit) for transportation by ship to destinations not connected by pipeline. It is turned back into gas for distribution to users through pipelines.