What progress on Turkish Stream?
During a visit to Ankara on Dec. 2, 2014, Russian President Vladimir Putin announced that Russia was giving up on plans to build South Stream, a mammoth and hugely expensive natural gas pipeline that was expected to transport some 63 billion cubic meters (bcm) of natural gas across the Black Sea to Bulgaria, then on to Southeast Europe and Italy.
Putin blamed the EU for South Stream’s death. The project did not comply with the EU’s Third Energy Package (TEP), which does not allow the same company — in this case Gazprom — to own both the gas and the pipeline through which it is transported. If Russia had been willing to consider a compromise, South Stream could have flown.
During the same visit, Putin also announced plans for a brand new pipeline: Turkish Stream. Turkish Stream would also cross the Black Sea but rather than end in Bulgaria, it would terminate in İpsala, a district of Edirne in northwestern Turkey, near the Turkish-Greek border, where a gas hub would be built. While Turkish Stream would also have a capacity of 63 bcm, unlike South Stream it would have four parallel pipes. The first pipe would deliver the gas that Turkey currently receives via Ukraine (some 20 bcm) by 2016. The goal is to have the other pipes operational by 2019 with the remaining 43 bcm going to Europe. Because Turkey is not an EU member, the TEP does not apply.
However, the pipeline will clearly not be able to extend beyond the Turkish-Greek border because the TEP applies in Greece as it did in Bulgaria. This means that if gas is to go on to Europe, either the pre-existing infrastructure will need to be used with additional connectors, or a brand new infrastructure must be built. Examples of this include the Trans-Adriatic Pipeline (TAP), the Italy-Greece-Turkey interconnector and the Trans-Balkan pipeline.
However, this is not straightforward, not least because of the costs that would be incurred. Furthermore, while TAP’s initial transport capacity is 10 bcm, it has an option to double this, and the relevant EU legislation left 50 percent of the pipe’s capacity open for Third Party Access (TPA). At the same time, the European Commission granted the Shah Deniz Consortium a TPA exemption for 100 percent of the initial capacity (10 bcm) of the pipeline for 25 years. This means that Russian gas cannot be transported via TAP for at least the next 25 years, unless there are exceptional circumstances, such as an unexpected demand for extra gas.
Moreover, there is currently insufficient EU support for Turkish Stream. First, because the EU has pledged to reduce its dependence on Russian gas, and support for Turkish Stream would contradict that goal; second, because one of Russia’s aims is to cut Ukraine out of the picture as a transit state, a move the EU is opposed to.
Russia is actively working to change the picture in the EU. Moscow does not want to lose its significant stake in the EU natural gas market, which is lucrative, plus, EU clients pay on time. In order to undermine the recently initiated Energy Union, Moscow is attempting to make separate deals with some EU member states (along with the likes of Serbia and Macedonia), as we saw with Hungary and, more recently, Greece.
During a meeting in Moscow between Greek Energy Minister Panagiotis Lafazanis and his Russian counterpart, Alexander Novak, on March 31, Lafazanis said that Greece supports extending a Turkish Stream gas pipeline into its territory. Russia will offer to provide preferential deals for gas, particularly on prices, in order to create a “bloc.”
This approach reflects some EU member states’ rejection of a common EU gas price, negotiated by the European Commission with Russia. Despite a number of energy crises with Russia, and despite, more recently, the Russia-Ukraine war, some states still prefer to deal bilaterally with Russia on energy, which is exactly what the Kremlin wants.
On April 14, Alexei Miller, the CEO of Gazprom, said an EU obstruction of the Turkish Stream would be a grave mistake that might prompt Gazprom to suspend the project and redirect its natural resources to Asian markets. This sort of blackmailing approach is typical of Russia, and a good reminder of why the EU seeks to diversify its energy sources and routes.