Thursday

27th Jul 2017

Gazprom and Turkey agree pipeline date

  • Russia's Gazprom aims at delivering 63 billion cubic meters each year to Turkey and the EU through its Turkish Stream pipeline (Photo: svenwerk)

Russia and Turkey went a step further on Thursday (7 May) towards building the Turkish Stream gas pipeline. 

Gazprom and Ankara agreed to start delivering gas to the Turkish market at the end of next year.

At the same time, Russian president Vladimir Putin offered Greece to fund the construction of a pipeline that would extend Turkish Stream to the heart of Europe.

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"An agreement has been reached on operational commissioning and the start of gas deliveries via Turkish Stream in December 2016," said Gazprom chief Alexei Miller in statement.

The 1,100-km pipeline, announced last December, is to supply 16 billion cubic meters (bcm) of gas a year to Turkey, Gazprom’s second largest market after Germany.

According to the plan, the pipeline will go under the Black Sea from Russia to the Turkish-Greek border and onward to Austria in order to also supply another 47 bcm to EU markets.

Four countries so far have declared their interest in the Turkish Stream project: Serbia, Macedonia, and EU member states Hungary and Greece. But Austria has stayed quiet.

Greece, the entry point into the EU, is a crucial partner for Russia and Turkey.

During a visit to Moscow a month ago, Greek prime minister Alexis Tsipras said "Greece [was] in the position of being a European hub".

In a phone conversation with Putin on Thursday, Tsipras confirmed his interest in participating in the project, through a public-private venture.

Putin said he’s ready to fund that venture and to be paid back with the profits that the company will make when operating the pipeline, according to the Greek PM’s office.

The Turkish Stream project was launched in December as a replacement to South Stream.

The Gazprom-majority-owned South Stream pipeline, under the Black Sea to Bulgaria, was abandoned after the European Commission said it had to conform with EU laws on separation of production and transmission assets.

Greek Stream

Speaking to press in Brussels earlier this week, Russia’s EU ambassador, Valdimir Chizhov, noted that Turkish Stream will depart the Russian coast at the same point as South Stream, follow two-thirds of the same path, then “tilt a bit to the left, to Turkey rather than Bulgaria”.

He said the Greece to Austria section “will be done in full accordance with existing EU legislation”.

He joked it might be called “Greek Stream”, given the history of difficult Greek-Turkish relations. But he said Gazprom would be “only too happy” to contribute to better ties.

The new Turkish Stream date comes two weeks after the EU commission launched an antitrust inquiry against Gazprom.

Chizhov said “I think Gazprom is in favour of an amicable solution”, which could entail changing its pricing model in order to avoid an EU fine.

He said the anti-trust dispute won’t affect EU-Russia-Ukraine talks on gas flows to the EU via Ukraine.

With Russia short of cash for big investments due to low oil prices, he noted “most experts” believe that oil prices will recover.

“Demand for natural gas is increasing and we expect that trend to continue”, he added.

Column / Crude World

Is Nord Stream II dead?

Russia state-controlled Gazprom plans to build Nord Stream II gas pipeline on its own after partners pull out.

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