Turkish Stream talks between Russia and Turkey continue

Official representatives of Russia and Turkey have made statements, though providing no concrete details, with regards to the unfreezing of the suspended Turkish Stream gas pipeline project. It is clear that the project is of interest to both countries but is still under consideration. According to Trend, Turkey’s Ministry of Energy and Natural Resources stated: “the exact date of unfreezing the project is yet to be determined.”

Recent discussions

On 26 July 2016, officials from Russia and Turkey discussed prospects for Gazprom’s proposed Turkish Stream project, yet they reached no decision. Therefore, according to Russia’s Deputy Energy Minister, Yuri Sentyurin, further talks on the proposed pipeline will take place in the near future.

This is something that Russian gas firm, Gazprom, is keen to continue. Gazprom’s Deputy Chairman, Alexander Medvedev told reporters: "We have already stated that the ball is in Turkey's court [to take the next steps on the pipeline]."

Further clues about the project may emerge on 9 August 2016, when Putin will host a meeting in St Petersburg with Turkey’s Erdogan.

The project

The Turkish Stream project is planned to have an annual capacity of 63 billion m3 of gas. The pipeline was expected to run from Russia to Turkey, via the Black Sea, to a hub on the border between Turkey and Greece where the gas would later be pumped on to southern Europe.

Sour relations

The project was initially announced in December 2014 as an alternative to a broader South Stream pipeline network to feed European markets. While the countries had reviewed the potential for energy co-operation last year, the project was suspended in 2015 due to sharply deteriorating relations between Russia and Turkey in recent years. The downing of a Russian military jet in Turkish airspace in November and Russian military intervention in Syria which frustrated the Turkish government are key instances that have caused political ties between them to sour.

The recent attempted military coup against Erdogan has also highlighted security concerns over oil and gas shipments in the area.

However, according to oilprice.com, the Russian news agency Sputnik reported that the Moscow-Ankara relations began to thaw after President Erdogan sent a letter to Vladimir Putin, apologising for the shooting of the jet.

The difficulties

According to Trend, despite the interest from both sides to implement the Turkish Stream project, analysts believe that there will be serious difficulties if it is turned into a reality.

“Low oil prices, the global gas glut, and Western sanctions make gas revenues from Turkey important for Russia, Agnia Grigas, Energy and Political Risks expert [and] Non-resident Senior Fellow at the Atlantic Council believes.

“But, as she told Trend, in the current economic climate faced by Russia, financing and implementing the Turkish Stream is problematic.”

Additionally, Marco Giuli, an Energy Issues Analyst at the European Policy Centre told Trend that the tightening of domestic policy in Turkey as a result of the attempted coup will seemingly worsen relations with the West. Cyril Widdershoven, Middle East Geopolitical Specialist and Energy Analyst believes that this raises a key constraint on the project; the position that the EU will take.

“In the light of Gazprom's growing hold on European gas imports, this could be the main issue. It also could conflict or constrain ongoing discussions on Nord Stream 2, as both projects are filling in some of the European gas demand, while both also are blocking parts of current gas transport via Poland or Ukraine,” Widdershoven commented to Trend.

Edited from various sources by Anna Nicklin

Read the article online at: https://www.worldpipelines.com/business-news/27072016/turkish-stream-talks-between-russia-and-turkey-continue/