Russia and Turkey made a “gas breakthrough” in relations

MOSCOW, 10 Oct — RIA Novosti/Prime. Russia and Turkey following talks between the two leaders on Monday were able to make significant progress in resolving all of the disputed and unsolved questions in the gas sphere. In particular, on Monday, the energy Ministers signed an intergovernmental agreement on the implementation of the project “Turkish stream”, thereby continuing the work begun nearly two years ago.

In addition, the parties were able to agree on granting Turkey a discount on Russian gas. All this together will allow Ankara to implement their long-standing desire to create a gas hub in Turkey.

“Turkey aims to become a transit corridor for Europe and intends to create together with Russia energy corridor for energy supplies to Europe. We look positively to the “Turkish stream”, which Russia is developing. Through this pipeline gas will be supplied directly to the Balkans via the Black sea,” — said the President of Turkey Recep Tayyip Erdogan after talks with Russian President Vladimir Putin.

The story flow

The intention to build a gas route announced in early December 2014, also in Turkey. Then it was decided to “expand” the gas flow from Bulgaria to Turkey, including due to the unconstructive position of the European Union.

A Memorandum of understanding for the construction of “Turkish stream” between Gazprom and Turkish Botas signed immediately “on the spot”. The document is intended to supply a volume of 63 billion cubic meters of gas a year, 14 billion cubic meters of gas intended for delivery to Turkey. The remaining amount is about 50 billion cubic meters of gas was supplied to the border of Turkey and Greece. The first gas via a new pipeline was initially expected in Turkey in December 2016.

However, the signing of the intergovernmental agreement was delayed. In the process of negotiation has undergone changes and initial agreements for the project. If initially it was assumed the construction of four pipelines with a total capacity of 63 billion cubic meters, then Gazprom began to say that he considers realistic construction of two lines with a total capacity of up to 32 billion cubic meters of gas per year. While the fate of the second leg will depend on the demand of Europe.

Complicated the process of preparation of an intergovernmental agreement and a new dispute between Moscow and Ankara at the price supplied to Turkey Russian gas. Last year, Botas filed a lawsuit in the Stockholm arbitration with the requirement of retroactive revision of the contract with “Gazprom export” from December 2014 and reducing the cost of “blue fuel” from Russia.

However, the real difficulty is in the fate of the project was found. From November 2015 Russia is almost entirely suspended political and economic ties with Turkey after Turkish F-16 fighter was shot down in Syria, the Russian bomber su-24. Warming has occurred only this summer after the apology Erdogan. Again began to operate working groups to implement the project, and Gazprom started to obtain the permission of Turkey for the construction of the pipeline.

Improved flow

Signed on Monday an intergovernmental agreement on the Turkish stream involves the construction of two threads of the main gas pipeline under the Black sea, the capacity of each line will total of 15.75 billion cubic meters of gas.

In addition, land will be implemented for transit thread to Turkey’s border with neighboring countries. As noted by the head of “Gazprom” Alexey Miller, the deadline for the construction of two marine thread — December 2019.

Later, Novak said the ownership of the gas transportation capacity. The marine section of the pipeline will own a Russian company. In this case the land plot of the “Turkish stream” in the first thread will own a Turkish company in the framework of the second line is a joint venture, the Minister explained.

Discount on gas and hub

Following the talks in Istanbul, Moscow and Ankara have been able to move and other gas issues.

Statements Miller made to the end of negotiations, it seemed, were no signs of a breakthrough in resolving the question regarding the value of Russian “blue fuel”. Communicating with journalists the head of “Gazprom” stated that Russian gas demand on the Turkish market, and its price is very competitive.

However, the point in the discussion of gas prices between Ankara and Moscow has put Russian President Vladimir Putin. He stated that the discussion of the project “Turkish stream”, the countries agreed on mechanisms of providing discounts on gas. According to the Minister of energy of Russia Alexander Novak, commissioned to work on specific figures on the discount was given to “Gazprom” and Botas.

In the aggregate, according to Putin, all achieved in the gas sphere the agreements will allow Ankara to realize its desire to build a major energy hub in Turkey. “Pay attention that in this way we are moving towards the implementation of the plans of the Turkish President about creating in this country a major energy hub,” — said Putin.

However, the Turkey in the realization of their aspirations to rely only on Russian gas is not going to. Earlier on Monday, Prime Minister Binali Yildirim, Turkey as soon as possible is going to implement another project on construction of gas transportation capacities in Turkey — TRANS Anatolian pipeline (TANAP), which envisages transportation of gas from Azerbaijani field “Shah Deniz” from the Georgian-Turkish border to the Western border of Turkey.

In Turkey, the Azerbaijani gas will be in 2018, and after the completion of the TRANS-Adriatic pipeline (TAP) the gas will go to Europe in early 2020.