- The Writer holds an MSc in Eurasian Political Economy & Energy from King’s College London and also an MA in European Studies from Sabancı University.
Russian President Vladimir Putin’s announcement on Dec. 2, 2014 cancelling the long planned South Stream pipeline project and instead proposing a major pipeline dubbed the Turkish Stream came as a complete surprise. With this proposal, Russia intended to bypass Ukraine and carry natural gas both to Turkey as well as to the EU. This unexpected U-turn by the Russian government to suspend the South Stream pipeline and the decision to launch a brand new pipeline raised eyebrows in the surrounding region, primarily in the EU.
The eventual volume of the Turkish Stream has maintained the same capacity of the South Stream of which 14 billion cubic meters (bcm) is intended to supply Turkey, and the remaining 49 bcm is set for EU consumption. Initially, pipelines were planned to be laid in four lines, each designed to carry 15.75 bcm of natural gas. The first line will feed the Turkish gas market at Kiyikoy in the European part of Turkey and the remaining three pipelines, would carry gas to Western Europe, reaching Ipsala near the Turkish-Greek border.
With the South Stream project, the plan was to deliver gas to various states in the EU including Bulgaria, Hungary, Slovenia, Italy and Austria. Nevertheless, with the Turkish Stream, it was projected that Russia would deliver gas to the Turkish-Greek border and from that point onwards, it would be left to EU countries to deliver gas where needed.
Bulgaria’s stance towards the South Stream project, during the implementation phase changed considerably on account of pressure from other EU states and EU institutions who claimed that the project did not conform to the EU’s third energy package regulations. Consequently, Russia’s approach towards Ukraine and to other Eastern European states amended to reflect Moscow’s red lines and in its priorities for the Turkish Stream. Its bypass of Ukrainian territory, in particular, has become Russia’s prerogative.
During the Soviet era, Ukraine was a reliable transit route for Russia, even after the breakup of the U.S.S.R. At the end of 2013, Russia’s Gazprom sent over 82 bcm of natural gas to the EU market via Ukraine. However, gas conflicts between the parties emerged from time to time especially in disagreements over gas prices, which increased tensions to such a level that both in 2006 and 2009, Russia decided to cut off gas flow. The crisis that erupted between Kiev and Moscow resulted in a two-week long gas disruption in Eastern and Central Europe in 2009.
Ukraine, as a result, has responded to the crises by reducing its heavy reliance on Russian gas. On the other hand, Moscow decided to terminate gas exports to the EU market via Ukraine from 2019 and to bypass Ukrainian territory by launching a strategy of diversifying its gas routes, such as through the Turkish Stream and the Nord Stream pipeline projects, which circumvent Ukraine.
Despite both parties’ hasty attempts to defuse the situation, the Oxford Institute for Energy Studies’ Jonathan Stern asserts that it is not within the realms of possibility to phase out gas transition between Russia and Ukraine, at least not until 2020, due to existing contracts with major European countries. The head of the Strategic Energy & Economic Company, Michael Lynch doubts that gas supplies will be phased out between Russia and Ukraine from 2019 onwards,
“If you’ve got customers and a line through Ukraine - and an oil price of US$50 - you’re not going to cut off the gas.”
Considering the fact that Russia exports approximately seventy percent of its gas to the EU market, any failure of future gas contracts would devastate Russia’s heavily hydrocarbon-based economy. Therefore, it would be plausible to predict that the Kremlin would do everything in its power to secure markets in Europe.
Although Russia defended the Turkish Stream project from the point of view of its profound effect on the EU’s overall energy security, upon its completion, the EU has been extremely doubtful about Russia’s intentions, and therefore initiated a policy of diversification of supply sources as part of the third energy package strategy.
Following the downing of the Russian air force jet near the Syrian-Turkish border in November 2015, it was thought that the future viability of the Turkish Stream would likely change from a potential game-changing pipeline to becoming a cause of regional tension similar to the Nabucco or the South Stream pipeline projects.
Subsequently, during the last nine months or so, Russia did not openly announce that the Turkish Stream was frozen. However, the Kremlin stated that priority will be given to the construction of the Nord Stream II pipeline, which could be interpreted as demonstrating that the Turkish Stream has been put on hold for the time being as part of Russia’s retaliation towards Turkey. If Russia totally abandons the Turkish Stream project, Turkey’s constantly growing energy needs would need to be supplied through alternative sources to overcome energy shortages.
Russia spent over $1.8 billion on pipelines for the first and second lines of the Turkish Stream to be laid under the seabed of the Black Sea. Additionally, Gazprom spent almost $400 million for pipe-laying vessels, as well as incurring costs of ceasing operations, which would mean writing-off a considerable expense unless the project is revitalized.
Overall the Turkish Stream would likely increase Russia’s presence in the gas mix of both Turkey and southeast Europe. Countries such as Greece, Bulgaria and Romania claim that with the Turkish Stream, the possibility of the creation of a European regional gas hub would increase given the large volume of gas which would flood the EU market from the southeastern borders. Above all, if the Turkish Stream project comes into existence and an additional 50 bcm of Russian gas flows into the EU gas market, Russia’s supremacy in the European gas market will be strongly felt.
- Opinions expressed in this piece are the author’s own and do not necessarily reflect Anadolu Agency's editorial policy.