Prospects for reviving Turkish Stream project appear more promising
Baku, Azerbaijan, August 2
By Elena Kosolapova - Trend:
The prospects for reviving the Turkish Stream pipeline project, which envisages Russian gas supplies to Turkey and further to Europe bypassing Ukraine, at least in a downscaled form, appear more promising given the recent dramatic improvement in Russian-Turkish relations, Gareth Winrow, independent analyst on Turkey, believes.
“It will not be surprising if Turkey and Russia return in practice to the situation as it was in the summer of 2015, when the prospects for building at least the first leg of Turkish Stream looked quite promising, that’s if Moscow and Ankara could come to terms over gas pricing,” Winrow told Trend by email on August 2.
Initially, the Russian "Gazprom" planned to build 4 lines of the Turkish Stream with total capacity of 63 billion cubic meters of gas per year. The capacity of each line was expected to reach 15.75 billion cubic meters per year. Later, it was decided to build fewer lines.
The Turkish Stream had to replace the South Stream project, which should pass in the Black Sea and through Bulgaria and deliver gas to the Balkan republics, as well as Hungary, Austria and Italy, but was abandoned in December 2014.
Gazprom refused from the South Stream gas pipeline because the European Commission did not grant an exception from the rules of the Third Energy Package, which, in particular, says that one gas provider should use no more than 50 percent of the pipeline capacity, and the remaining capacity should be put up for auction.
In late 2015 the Turkish Stream project was frozen due to sharp deterioration of relations between Moscow and Ankara when Turkey shot down a Russian Su-24 bomber with two pilots on board. On June 27, Turkey’s President Recep Tayyip Erdogan sent a letter of condolences to Putin over the death of Russian Su-24 pilot and expressed regret over the incident.
After that, the two countries’ relations began to improve. Last week Russia and Turkey announced the resumption of negotiations on the Turkish Stream this week and the intention to create a working group on this project.
On August 9 Russian and Turkish Presidents Vladimir Putin and Recep Tayyip Erdogan will hold the first meeting after the incident with the aircraft in St. Petersburg.
“Erdogan’s meeting with Putin could lead to an announcement for re-launching plans to build a 15.75 bcm/y pipeline to connect Russia and Turkey via the Black Sea,” Winrow said.
He noted that the laying of the first line of the pipeline across the Black Sea would enable Russia to bypass “troublesome” Ukraine to deliver significant gas volumes to Turkey.
Moreover, the expert noted that Russian officials appear hopeful of building a second pipeline of similar capacity to carry Russian gas to south-eastern Europe via Turkey.
“However, such a pipeline could encounter the same problems as the earlier proposed South Stream project,” he said.
Winrow noted that citing the provisions of the EU’s Third Energy Package, Brussels has opposed Gazprom’s control over the proposed pipeline which would cross EU territory, either running through Greece or Bulgaria.
He said that one possible way around this would be for a second string of Turkish Stream to connect with interconnector lines in south-eastern Europe where gas flows could then be reversed.
“This may be seen as not running counter to the provisions of the Third Energy Package,” he said.
In return, though, talks could also re-commence between Moscow and Ankara over reducing the price of gas for deliveries to the Turkish State Pipeline Corporation, BOTAS, according to the expert.
Winrow noted that there has also been some speculation over possibly linking a deal on Turkish Stream with reviving plans for a Samsun-Ceyhan oil pipeline to carry Russian oil across Turkey bypassing the Bosphorus.
But, it seems that Russia is also re-considering plans to resurrect the moribund Burgas-Alexandroupolis Bosphorus-bypass oil pipeline option which will not cross Turkey’s territory, he said.