Hurriyet Daily News and RT.com :Russia and Turkey, at loggerheads since Ankara shot down a Russian warplane last week, have suspended talks on their joint Turkish Stream project to pipe gas to Turkey and southern Europe, Russia’s energy minister said on Dec. 3.
“Currently talks are suspended,” Energy Minister Alexander Novak said, quoted by RIA Novosti state news agency. “Work on formulating agreements on Turkish Stream is suspended,” particularly because “an intergovernmental commission on trade and economic cooperation has stopped meeting” under Russia’s retaliatory measures against Ankara, Novak said. However, he said talks on building a nuclear power plant in Turkey remained open, Reuters reported.
The Turkish Stream project would see four pipelines carrying Russian natural gas under the Black Sea, linking southern Russia to western Turkey.
Meanwhile, Turkey has agreed with Azerbaijan to accelerate the Trans-Anatolian Pipeline (TANAP), with an aim to have the gas project completed before the planned 2018, Prime MinisterAhmet Davutoğlu said on Dec. 3, as quoted by Reuters.
In a joint news conference with Azerbaijan President Ilham Aliyev in the capital Baku, Davutoğlu also said Turkey was willing to share details of its recent jet downing incident with Russia.
This was the latest move by Turkey’s leaders, who are in an effort to diversify energy supplies as ties with its largest natural gas provider Russia have tumbled following the downing of a Russian warplane by Turkey.
Greece is interested in expanding its energy cooperation with Moscow and the construction of an extension pipeline to the Turkish Stream project, said the Prime Minister Alexis Tsipras during his meeting with the President of Russia Vladimir Putin on Wednesday, April 8.
In the light of the worst standoff between the West and Russia since the Cold War, Tsipras went on a two-day visit to Moscow (8-9 April), where energy issues dominated the discussions between Greek and Russian government officials.
The previous day (7 April), foreign ministers from Greece, Hungary, Serbia, Turkey and the Former Yugoslav Republic of Macedonia (FYROM) signed a declaration of intent regarding the Turkish Stream project, in Budapest.
According to Mr. Tsipras, the project will attract new investments in the Greek economy, stabilize the region and set up the path towards improving relations with Ankara.
Tsipras and Putin agreed that Greece could play a big role in the Turkish Stream pipeline project, making it a hub between Turkey and the European gas market.
“The new route will provide for Europeans’ fuel needs, and would allow Greece to become one of the main power distribution centres on the continent, and could help attract significant investment into the Greek economy,” Putin said during the joint news conference with Tsipras.
“Our pipelines will receive gas from the Turkish border, and will provide energy security for both Greece and the European market,” Tsipras noted, adding that the Russian project will boost jobs and growth in the debt-ridden country.
The Construction Plans of “Turkish Stream”
The plans include the construction of a 50 bcm gas transport hub on the Turkish-Greek border. From that point, an extension pipeline may be built through Greece and further towards the European countries such as FYROM, Serbia, Hungary, and Austria.
In March, the President of Turkey Recey Tayyip Erdogan called the Turkish Stream an important project after his meeting with the Ukrainian President Petro Poroshenko, stressing he found the Russian gas pipeline offer acceptable after the cancellation of the South Stream. The project, Mr. Erdogan added, would allow diversifying the gas supply sources.
The Turkish Stream plans quickly got in the spotlight of the Turkish media: according to them, Mr. Erdogan’s decision would allow to transform Turkey from a transit country into the top European gas supplier, greatly improving Ankara’s position and providing additional profits.
In addition, Taner Yildiz, Turkish Minister of Energy and Natural Resources, said he sees no competition or rivalry between the Turkish Stream and the TANAP projects, since the supply routes will work at the same time. However, he admitted that the Azeri natural gas would end up being more costly, but the overall gas mix would make energy cheaper for the Turkish people.
Experts warnings about the project
Meanwhile, several international experts warned that the joint Russian-Turkish project might cause opposition of the Western politicians who earlier had brought the demise of the South Stream project. In particular, the visit of Alexis Tsipras to Moscow brought forward the outrage from the EU politicians, disappointed with Greece’s attempts to conduct independent policy and become closer to Russia in order to resolve internal economy issues.
Some media sources also noted that the EU and the US might choose to incite political unrest in the countries that would be involved in the Turkish Stream project, citing the prevented coup d’etat in FYROM Macedonia in January as an example. A possible alternative to such influence, some media sources say, would be the attempts to bring out the internal tensions in Turkey, and the Crimean Tatars may be potentially used as a pawn to pull the 75-million population of the country into unrest.
Meanwhile, Kamal Sido, head of Middle East Department of the Society for Threatened Peoples (STP), highlighted a list of issues that may arise in Turkey and possibly hinder the project.
“We know the Kurdish issue has not been resolved yet. There are talks between the Kurdistan Workers’ Party, [the party’s leader] Abdullah Ocalan, and the Turkish government, but currently there is no final decision. Of course this will negatively affect the gas pipeline issue until the problems have a solution,” he explained.
In addition, according to him, some Crimean Tatars that have been in Ukraine at the time when Crimea joined Russia are now banned from returning, and the human rights organizations are actively working with this issue.
The construction of the Turkish Stream is unlikely to cause any large-scale civil unrest, suggested Harun Ozturkler, economy researcher, associate professor of Economic and Administrative Sciences at the Kirikkale University.Discussing the value of the Turkish Stream, the expert called it a new step for strategic relations between Europe, Russia and Turkey, and expressed his hope that it would change the geography of the European energy market in the future.In his opinion, Greece will gain the most out of the Turkish Stream.
“From a perspective of political economic and international relations, at this stage of the Ukrainian crisis, the importance of the project is that it will lessen the role of Ukraine for EU, and provide Russia with a new advantage in its international political moves against the west and USA,” the economy researcher stressed, adding that Europe is yet to find a full alternative to the Russian natural gas supply.“This project [Turkish Stream] will help Greece’s struggling economy though its investment and employment effects,” Harun Ozturkler explained.
At the same time, he pointed out that Turkey may greatly profit from the joint project with Russia, especially along with the TANAP gas pipeline project that officially went into the construction phase in March 2015.
Talking about the opponents of the Turkish Stream, he suggested that the start of the project may interfere with the plans of the United States and several Middle Eastern countries.
“This project is against the economic and political interests of Iran, the Kurdistan Regional Government and the USA. This move will make alternative natural gas projects involving Iran, and Northern Iraqi natural gas less competitive,” the expert explained, noting that Tehran may potentially influence the situation in the future.Moreover, from his point of view, the influence of Tel Aviv or a possible instability in Greek-Turkish relations may affect the talks.
“Israel may use its energy deal with Cyprus to influence Greece’s position towards the project. Furthermore, there might be problems between Turkey and Greece as well. The potential problem between Turkey and Greece is that both parties will struggle to have the marketing hub of the project rather than just be a transfer country,” the economy researcher pointed out.
On the same subject, Chi Kong Chyong, research associated of the Energy Research Group at the University of Cambridge, Director of Energy Policy Forum, noted that once fully constructed, the Russian-Turkish pipeline will present a great threat to the political and economic position of Ukraine.
“Politicians and public perception about the project is such that if Turkish Stream is built in full (with four lines) then it could jeopardize Ukraine’s position in Europe, as one of the largest transporter of Russian gas to Europe, hence leaving Ukraine with little economic option to influence Russia,” the expert explained in an interview to “PenzaNews” agency.
However, according to him, the European Union will only benefit from simultaneous gas supplies from Russia and Azerbaijan.At the same time, Chi Kong Chyong added, the transit countries will also profit from the project, gaining direct access to an energy supply line, an additional source of income, and more political weight and importance vis-à-vis Brussels and Moscow.
Gazprom energy puzzle through Turkey
“If Gazprom could prove that it could build Turkish Stream pipelines at least cost and benchmark these costs against best practices of building offshore pipelines and abide by laws and regulation, particularly on competition, procurement and transparency issues then only Turkey could potentially stop the project,”Chi Kong Chyong clarified.
“Turkey is one of the fastest growing gas markets in the region, and hence for Gazprom, having already invested a substantial amount of money, it makes sense to build at least the first two lines of the Turkish Stream. The first line will replace the existing flows from Russia through Ukraine to Turkey, and the second line should serve as an option for Gazprom to meet any additional demand from Turkey. In a nutshell, the first two lines can be easily built since money has already been spent, and they should also serve as an option for Gazprom to expand the project and build the third and fourth lines to serve Europe, should the political environment in Europe allows Gazprom to do so,” said the speaker.
How the deal affect the Persian Gulf Countries and Global Oil Politics
However, Necdet Pamir, renowned energy policy expert, Chairman of the Energy Commission of the oppositional Republican People’s Party of Turkey, reminded that the United States and the European Union have begun a full-fledged campaign to exert pressure on Russia, and stressed that Moscow’s opponents are using both sanctions and Saudi-supported oil market speculations.
“With one stone, the Americans and the Saudis are trying to kill many birds. [America is] trying to limit the oil and gas revenues of Russia, Iran and even Venezuela, while decreasing the US oil import bill. Saudis are also trying to increase their influence in the region against the Russians and Iranians while trying to capture the market share of Russia in the oil market,” Necdet Pamir explained.
At the same time, he expressed his doubt that Turkey would be able to gain any profit from the project under the currently known conditions. In particular, according to the expert, the parties need to resolve the issues of gas price, re-export rights, and construction of gas storage facilities required for the task.
Discussing the issue of co-existence of the Turkish Stream with the Azeri TANAP, Necdet Pamir stressed that both projects may end up in a situation when one of the supply routs would be made redundant.
“The EU is trying to diversify, but also trying to reduce its consumption and increase the percentage of the renewables in its energy mix. Therefore, there seems to be not enough room for both projects,” he explained.
In conclusion, the SETA Foundation representative added that Ankara’s growing energy cooperation with Moscow would allow Turkey to cash in its strategic advantage in the region and make the country more attractive for investors.