Major obstacles stand in way of 'Turkish Stream'

ANKARA

Major obstacles stand in the way of an intergovernmental agreement between Turkey and Russia for the so called ‘Turkish Stream’ natural gas pipeline project.

Last December, Russian President Vladimir Putin announced the Turkish Stream project which is to carry Russian gas to European markets via the Black Sea and Turkey.

Although nearly eight months has passed, an agreement between Turkey and Russia for the Turkish Stream pipeline project has yet to be signed.

According to official sources who spoke to Anadolu Agency, the main issue between the two countries is Russia refusal to provide discounts on Russian gas supplies to Turkey.

Turkey’s Energy Minister Taner Yildiz had announced on Feb. 27 that Russia agreed to give Turkey a 10.25 percent discount on natural gas supplied from March onwards. However, according to official sources, Russia is not willing to provide the agreed discount unless Turkey signs the agreement for Turkish Stream. 

As Russia’s second biggest client for its natural gas, Turkey requests the discount be provided regardless of the status of the Turkish Stream project. Turkish officials stated that natural gas prices are linked to oil prices, and added that oil prices have fallen by more than 40 percent since June, 2014.

Another important difficulty on the negotiation table is the issue of the pipeline’s integration. 

While Turkey requests that the pipeline be integrated into its national gas grid, Russia’s energy giant Gazprom wants the pipeline to be isolated from Turkey’s grid and to reach as far as the Turkish – Greek border.

Two weeks ago, Minister Yildiz said that Turkey intends to be not only a transit country in the pipeline project, but also an energy-hub for the region. However, he added that Russia’s current offer for the project was "different" than it was in the beginning.

“Russia’s offer is very different now then what Russian President Vladimir Putin had announced last December, and we cannot accept this. Turkey and Russia need to create an environment that is mutually beneficial for both countries,” he said.

Turkish Stream is projected to have a capacity to carry 63 billion cubic meters of natural gas per year. It will deliver 47 billion cubic meters of gas to Europe, while the remaining amount is to be allocated for Turkey's domestic use.