Russia gas price pressures Turkey
Baku, Azerbaijan, May 5
By Rufiz Hafizoglu - Trend:
In 2012, Akfel, Bosphorusgaz and Kibar Enerji companies received licenses to import gas for 30 years. The fourth company - Batı Hattı received a license for 23 years. The companies are to import six billion cubic meters of Russian gas into Turkey, annually.
According to the agreement, Akfel will import 2.25 billion cubic meters of gas a year from Russia, Bosphorus - 1.75 billion cubic meters, Batı Hattı and Kibar Enerji - one billion cubic meters annually, so around 22 percent of Russian gas imported to Turkey will be purchased by the Turkish private sector.
According to the Turkish media, around 1,000 cubic meters of Russian gas have cost private companies $390 since January 1, 2015. Previously, the Turkish private companies paid $374 for import of 1,000 cubic meters of Russian gas.
Around 1,000 cubic meters of gas imported from Russia by the Turkish state pipeline company Botas costs Ankara $415, and the price doesn't meet the country's interests currently.
Turkish officials have already said the price of gas, supplied from Russia, is detrimental to the country's budget.
Despite the fact that Turkey and Russia had to sign an agreement on a discount on the gas in March 2015, this still has not happened.
While BOTAS expected that Russia would set the gas price at an acceptable level for Ankara, Gazprom today agreed to offer a discount to private Turkish companies that account for over a third of Russian gas import.
The gas discount for Turkey's private sector will near 25 percent in the first quarter and additional 15 percent in the second quarter of 2015, according to media reports. As a result, Turkey's private companies will pay around $260 per 1,000 cubic meters of Russian gas in May. Thereby, Russia intends to maintain its share in Turkey's energy market.
This step taken by Russia is nothing but an attempt to put pressure on Turkey through the private sector. Thereby, Russia shows its readiness to make concessions on gas prices only under one condition: Ankara, for its turn, should make concessions in the issue of implementation of the Turkish Stream project.
Turkey's main reason to refuse signing the agreement on the discount for the gas delivered from Russia was Moscow's demand from Ankara to make concessions in the implementation of the Turkish Stream project. However, the Turkish side hasn't specified what kind of concessions they are.
Discount for Russian gas delivered to Turkey is of special importance for the latter. But it doesn't mean that Ankara will make concessions to Moscow in the issue of construction of Turkish Stream.
It is not ruled out that if Gazprom doesn't consider the possibility of offering discount to BOTAS, Turkey will appeal to the court of arbitration as it previously warned.
Edited by CN
Rufiz Hafizoglu is the head of Trend Agency's Arabic news service, follow him on Twitter: @rhafizoglu