Our wish is to see a strong Turkish lira against the U.S. dollar in the third and last quarter of 2015 to aid BOTAS' financial difficulties, said the chairman of Natural Gas Distribution Companies Association, GAZBIR of Turkey on Thursday.
Turkey's Petroleum Pipeline Corporation, BOTAS, has debt of around $6 billion because the state-owned company subsidizes consumer gas prices. Additionally, the company's export prices exceeds the selling price in the domestic market creating a deficit in its budget.
On Thursday, the cost of Brent crude oil was around the $55 per barrel mark.
"Oil prices reached this level from $120 in June 2014. That means this fall can affect natural gas prices," Chairman Yasar Aslan said adding that this is an advantage for BOTAS and the consumers.
Also the dollar exchange rate against the Turkish lira puts pressure on its budget as the company imports gas with U.S. dollar denominated prices and sells with the Turkish lira.
"Lower oil prices are good news for BOTAS, however we shouldn't forget the Turkish lira weakens against the dollar. A strong Turkish lira in the next period of 2015 may help BOTAS to pay its debts with ease," he said.
Turkey obtained 10.25 percent discount on natural gas prices imported from Russia after several meetings with Russia's Gazprom in late February.
Turkey's Energy Minister Yildiz said earlier that BOTAS will benefit from the discount to pay its debts.
"We expect BOTAS to have cash flow by June 2015 thanks to both the discount and the result of the arbitration case over Iran's natural gas prices," Yildiz said referring to the recent court case which expects to see a ruling granting more competitive gas market prices.
BOTAS's capital costs will drop under the higher volume of sales for the first time, and it will start to make a profit as the international natural gas market prices fell amid the oil price drop.
- Winter of 2015
Arslan said that contrary to expectations, BOTAS' policies and gas distribution infrastructure was effective enough to handle last winter's challenge in providing uninterrupted gas supplies to Turkey.
"We had a very strong winter this year and natural gas consumption soared. The supply-demand balance was at a critical level but BOTAS handled the situation with precision. BOTAS adopted the correct policy in winter to prevent natural gas cuts across the board in Turkey. It used its distribution system very effective," he said.
"The corporation had good relations and full cooperation with other private distributor companies, which helps BOTAS in its struggle to implement best practice strategies," he added.
By Murat Temizer
Anadolu Agency
murat.temizer@aa.com.tr