Nord Stream 2 has more chances than Turkish Stream, expert says

Oil&Gas Materials 9 October 2015 13:01 (UTC +04:00)
The Nord Stream expansion project has more chances of supplying Russian gas to the EU compared to the Turkish Stream project
Nord Stream 2 has more chances than Turkish Stream, expert says

Baku, Azerbaijan, Oct. 9

By Elena Kosolapova - Trend:

The Nord Stream expansion project has more chances of supplying Russian gas to the EU compared to the Turkish Stream project, Head of the Greek Energy Forum in Brussels Constantine Levoyannis believes.

Levoyannis in an interview with Trend noted that several serious players have already expressed commitment to becoming shareholders of Nord Stream-2 project and the markets that this project is targeting are larger than the possible markets of the Turkish Stream.

The shareholders of the joint company New European Pipeline AG, which will work on the construction of the Nord Stream-2 pipeline signed an agreement in early September.

The shareholders will include Russian Gazprom (with a share of 51 percent), German E.On (10 percent), Dutch-British Shell (10 percent), Austria's OMV (10 percent), German BASF/Wintershall (10 percent) and French Engie (9 percent). The project envisages the construction of two gas pipeline lines from Russia to Germany via the Baltic Sea with a total annual capacity of 55 billion cubic meters of gas.

Regarding the Turkish Stream pipeline, Levoyannis believes that important determining factors with regards to the signing of any agreement on this project is political stability in Turkey.

"If Turkey comes out of the next round of elections [which will be held on Nov. 1] with a stable government, then progress could be made in negotiations with Gazprom, but only for 1 or 2 of the envisaged strings of Turkish Stream," the expert said.

He noted that Turkey has a voracious gas demand which continues to increase in line with population growth. Meanwhile, Levoyannis noted that Turkey and Russia are still in negotiations over the renegotiation of existing gas supplies through Blue Stream and these negotiations are important with regards to any future deal on Turkish Stream.

In the framework of the negotiations Russia has offered Turkey a 6 percent discount on the current gas supplies as a concession for the right to build Turkey Stream through Turkey. Turkey insists on a 15 percent discount. No agreement on this point has been reached yet.

"I think it is unlikely that any commercial agreement [on Turkish Stream] will be inked by the end of the year," Levoyannis said.

With regard to the Europe's need of gas from the Turkish stream, the expert noted that the EU's gas import dependency is projected at around 380-450 billion cubic meters per year by 2030 - at about the current level, according to the latest EU statistics.

Moreover Levoyannis noted that EU Commissioner for Energy and Climate Action Miguel Arias Cañete at the European Parliament Plenary two days before said that existing transport capacity from Russia is currently used only at around 50 percent and already well exceeds the EU's needs for likely future supplies. Cañete also said that if Nord Stream 2 project is constructed, transmission capacity from Russia will increase excess even further and it will allow to dry out the transit through Ukraine.

The Turkish Stream project includes the construction of a gas pipeline from Russia to Turkey via the Black Sea. It was assumed that the gas pipeline would consist of four branches at 15.75 billion cubic meters of gas each.

The gas of the first branch is completely designed for the Turkish market. The rest amount will be supplied to the Turkish-Greek border, where it is planned to create a gas hub. The construction was planned to begin in June, but the project is still being discussed.

Edited by T.T.

Follow the author on Twitter: @E_Kosolapova