SEE traditionally stands under the shadow of NWE part of the regional gas market, as the latter’s influence on supply-demand balance and pricing environment is substantially higher. However, the changes that take place in the Balkans and neighbouring countries this year are important both for that region and for the whole continent, with the impact they have on the European market will likely be greater over time.
Gas market in SEE has entered a new phase in its development in 2021, marked by a shift in trade flows. After getting access to new sources of supply, regional players now have the opportunity to ignore once main delivery routes, as clearly exemplified by Croatia and Serbia.
Since the launch of Krk LNG terminal in early January, Croatia´s demand for volumes from Hungary has decreased impressively. While during the period 1 January to 11 June 2020, Croatia received about 550 mcm through the Dravaszerdahely point on the border with Hungary, less than 350 mcm was imported in the same period of 2021. Moreover, in June, gas started to flow in reverse direction, which should not come as a surprise given the list of companies that had booked the regas capacity at the Croatian LNG terminal.
This year’s gas exports from Hungary have also fallen to Serbia, which has enjoyed deliveries along the Balkan Stream pipeline starting from January. As of 11 June 2021, approximately 1.2 bcm entered Serbia via Bulgaria at the newly created Zaychar interconnector, while Hungarian flows shrank by almost nine times, year on year, to 100 mcm.
The next thing on the agenda is the start-up of Serbia-Hungary interconnector expected by the end of 2021, making it possible for the TurkStream to reach Central Europe. This in turn should result in freeing up some more volumes piped eastwards from Austria. Further decrease in demand for gas traded at VTPA will have long-run effect on price movements on the key regional hub but that is another story.
Source: Yakov Grabar
See original post by Yakov at LinkedIn.