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Monday, 12 September 2016

Will Russia and Turkey Change the Energy Map of Europe?


Will Russia and Turkey Change the Energy Map of Europe?
PYOTR ISKENDEROV | 10.09.2016 | OPINION

Will Russia and Turkey Change the Energy Map of Europe?

The meeting between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdoğan during the G20 Summit in Hangzhou has given fresh impetus to bilateral relations and joint projects. This primarily relates to the construction of the Turkish Stream pipeline, which may become one of the key elements of a new gas pipeline infrastructure in Europe.
On 7 September, the following statement appeared on Gazprom’s website: «Gazprom has received, through diplomatic channels, the first permits for the TurkStream project from the authorities of the Turkish Republic after the decision to resume the project this year. At last week’s negotiations between Alexey Miller, Chairman of the Gazprom Management Committee, and Berat Albayrak, Minister of Energy and Natural Resources of the Turkish Republic, the parties reached the agreement to shortly complete all the required preparatory procedures for launching the TurkStream project. ‘The issuance of first permits is good news for Gazprom. This move of the Turkish side reflects the interest of Turkey’s government in the TurkStream project and marks the transition to its practical implementation,’ said Alexey Miller».
The Turkish Stream pipeline project involves the construction of a gas pipeline from Russia to Turkey along the bottom of the Black Sea. 660 kilometres of pipeline will be laid in the old South Stream corridor, which was cancelled in December 2014, and 250 kilometres will be laid in a new corridor towards the European part of Turkey.
A year ago, Turkey was not particularly interested in connecting to the pipeline to Southeast Europe, but today the situation has changed. This change was reflected in Turkey’s desire to strengthen relations not just with Russia, but also Greece (a traditional antagonist of Turkey) and other Balkan countries.
It is interesting that Turkey is even prepared to make substantial financial concessions to Russia, including paying for half of the pipeline’s construction, a pipeline that the country had previously rejected. President Erdoğan has suggested sharing the costs for the Turkish part of the project.
According to Alexey Miller, Chairman of the Gazprom Management Committee, Ankara is currently open to the possibility of Russian gas supplies to the Turkish-Greek border and on to Europe. Similar information was reported a few days ago by Russian Energy Minister Alexander Novak. He believes that in one to two months, Moscow and Ankara will be ready to sign an intergovernmental agreement so that the first line for the supply of gas to Turkish consumers could be implemented by the end of 2019.
As for the construction of a second pipeline to carry gas to consumers in Southeast Europe, Alexander Novak has stated that Russia is only prepared to construct this after obtaining guarantees from EU leaders that this infrastructure will be in demand. This is a decision for the European Commission (EC). If the EC does not provide cast-iron guarantees, there is no doubt that the same will happen as happened with the South Stream project, which the European Commission simply blocked.
In an interview with the Bloomberg news agency, Russian President Vladimir Putin stated: «We very much expect that we’ll be able to establish a constructive dialogue. We have many big projects, including Turkish Stream in the energy sector. And I think that ultimately we’ll complete it, at least the first part relating to expanding transport capacity and boosting deliveries to the domestic Turkish market. There will be the possibility of transit to European partners, again, if they want it and if the European Commission supports it».
The overall situation in Europe’s energy markets and beyond is also a good argument for implementing the Turkish Stream pipeline project. We are referring to the sustained growth of Russian gas exports, the reduction of domestic gas production in Europe, a reduction in the amount of gas being provided by other suppliers, and the growth of demand in the Asia-Pacific Region (APR).
According to the Turkish newspaper Hürriyet, «Turkish-Russian relations are warming again following the plane crisis that stopped the world’s largest energy investments». The newspaper also warns that the US and the European Union may try to do everything possible to thwart the implementation of Russian energy projects (and not just the Turkish Stream pipeline project, but also the construction of the Akkuyu Nuclear Power Plant in Turkey), including through «the support of terrorist organisations» and «warmongering». «Isn’t the statement ‘We will bring peace and democracy to the Middle East’ simply a guise for ‘oil wars’?» asks the newspaper. The question is undoubtedly rhetorical, since the answer lies in the question itself.
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