Turkey is the new Ukraine. Sorry, Ukraine.
When it comes to fights with Russia, Turkey has replaced Ukraine as the latest country keeping Russia in the headlines. Last month’s downing of a Russian Sukhoi SU-24 fighter jet enroute to Syria has driven a wedge between the two. Russia sanctioned Turkey. And on Wednesday, Reuters reported from Moscow that Turkey will cut back on its imports of Russian liquefied natural gas (LNG).
“Turkish firms are not simply worried about a reduction in LPG deliveries from Russia because of the current political situation, they are already preparing for this,” one LPG trader told Reuters. “It may be more expensive, but the process of how to ensure future deliveries from elsewhere is being worked out. We are not just talking about deliveries from Algeria, but from the United States as well.”
Ah, of course.
The real headline here is that there is an organized effort to squeeze Russian energy firms out of Europe.
Turkey is preparing to cut imports of LPG from Russia by a significant 25% next year. This puts a major damper on the Gazprom -Botas Petroleum Turkish Stream project, a project that was designed to connect Turkey to Europe through Greece. When that deal was discussed, U.S. Secretary of State John Kerry lobbied the Greek government to diversify its supply by turning to U.S. LNG instead of cheaper Russian imports.
The Turkish Stream pipeline was created following the death of the South Stream pipeline, a deal between Gazprom and a number of European energy giants like Italy’sEni . That pipeline was supposed to cut through Ukraine. Russia and Ukraine are now at loggerheads so that deal is off.
Turkey looked like a natural fit. The deal has been plagued for months, shrinking in size each time Gazprom CEO Alexey Miller discusses it. A number of east European countries are currently trying to block the Nord Stream 2 pipeline, which is currently only on paper and signed in June between Shell, E.On and Austria’s OMV Group. There is an ongoing trend in Europe that is designed to cut Russia out of the European energy markets. Russia is the lead foreign exporter of natural gas in the E.U.
