The European Union's approach to the extension of the TurkStream gas pipeline to EU markets is mixed, with Northern and Southern Europe countries differing over the need for more Russian gas, experts told Anadolu Agency on Monday.
'While it is highly likely that some Balkan countries would be quite interested in seeing the TurkStream develop beyond a Turkey-Russia project as was the case with the South Stream, it is unlikely in the short term that the EU as a whole will share their enthusiasm,' said Marat Terterov, director of the Brussels Energy Club.
The TurkStream project, announced by Putin during a December 2014 visit to Turkey, will carry gas from Russia under the Black Sea to Turkey's Thrace region. One line, with 15.75 billion cubic meters of capacity, is expected to supply the Turkish market, while a second line intends to carry gas to Europe.
The intergovernmental agreement on the project was signed on Oct.10 in Istanbul between Turkey and Russia during the World Energy Congress 2016.
'At the moment I cannot say that the EU, namely the Parliament and the Commission, have a positive attitude towards any new infrastructure projects involving Russian gas. These simply do not fit into the EU Energy Union initiative, which advocates de-carbonization, diversification and European law compliance,' he added.
Terterov noted that another project, the Nord Stream II, involving Russian gas, is currently unable to benefit from EU funding under the Projects of Common Interest (PCI) facility. This is despite many voices in the industry arguing that it is a cost-efficient way of bringing additional gas volumes to the EU, in relation to TANAP for example.
The TANAP project aims to bring natural gas, produced from Azerbaijan's Shah Deniz-2 gas field and other areas of the Caspian Sea, primarily to Turkey, but also on to Europe via the Trans-Adriatic Pipeline (TAP). The project is planned to be operational in 2018 with an initial capacity to carry 16 billion cubic meters (bcm) of Azeri gas through Georgia to Turkey.
The Nord Stream II natural gas project is one of the projects currently at the center of political discussions in the EU. The project consists of a twin 1,224-kilometer-long offshore pipeline system through the Baltic Sea, from Russia to Germany. The pipelines are planned to be constructed with a capacity to transport 55 billion cubic meters of natural gas a year to Europe. This amount is enough to supply about 26 million households in the region.
He highlighted the strength of political resistance to new projects involving Russian gas that are prevalent in the European Parliament.
'I don’t know the cost efficiency projections for the TurkStream, but I would say this project would also face similar resistance to that being experienced by the Nord Stream II. Furthermore, the EU is currently backing plenty of new gas supply initiatives which have the objective of lessening the Union’s dependence on Russian gas,' Terterov said.
These include the Polish-driven Northern Gate project and LNG terminals such as those currently being developed in Poland and Lithuania, according to Terterov.
'I should say that it does not always make commercial sense to support such projects. Russia remains the EU’s lowest cost producer and evidence for that is that Russian gas exports to the EU are increasing, despite the EU’s political position on Russian gas. But gas has always been a market experiencing overly high levels of government involvement,' he added.
- No official policy yet from European Commission
On the other hand, sources from the European Commission who requested anonymity due to restrictions on speaking to the media told Anadolu Agency that Brussels have not yet set a specific policy on the TurkStream project.
'The Commission does not have any specific comments to make as regards this project,' a European Commission spokesperson said, noting that the Commission bases its policy priorities on energy diversification and energy security with the following criteria:-
- EU is committed to the diversification of energy sources, partners and routes, aiming to reduce dependence on a single supplier or route. This is part and parcel of the Energy Union Strategy
- To reach this objective, the Commission aims at more interconnected and competitive gas markets within Europe. Such examples at the center of this strategy include the Southern Gas Corridor to bring gas from the Caspian basin to Europe, and the establishment of liquid gas hubs in the Mediterranean area and Liquefied Natural Gas.
- Work to that effect is also being carried out among others in the framework of the CESEC High Level Group (Central and South-Eastern Europe Gas Connectivity) and on implementing the EU Liquefied Natural Gas and storage strategy.
- Infrastructure that spans over to the EU - as any other pipeline in the EU - will have to fully respect EU law
- 'Nord Stream II and TurkStream are complimentary'
Marco Giuli, policy analyst at the European Policy Center, underlined that the Nord Stream II and the TurkStream are not intended to serve the same segments of the EU gas markets. With potentially the exception of Italy, where the second leg of the TurkStream could gain access to the Trans-Adriatic Pipeline (TAP) once the exception regime established for SOCAR expires.
'If the Russian intention is to entirely bypass Ukraine, these two projects will not be alternatives for each other, but will be complimentary. The EU does not support them, however, and potential leverage on the Nord Stream II is certainly greater than on the TurkStream, which remains a Russia-Turkey project,' Giuli said.
The EU stated its intention to support the improvement of the Ukrainian grid and maintain transit through it, while limiting Russian overcapacity in order to reduce reliance on a single supplier, according to Giuli.
'However, these intentions seem not to be fully supported by all member states, and recent decisions such as granting Gazprom larger access to the OPAL pipeline seems not to go in the stated direction,' he concluded.
The OPAL pipeline provides the mainland extension of Russia's Nord Stream I pipeline across Germany with 36 billion cubic meters (bcm) of capacity per year.
By Ebru Sengul
Anadolu Agency
ebrusengul@aa.com.tr