The Turkish route for Europe
Vladimir Putin’s announcement, with which the Russian President, on December 2, announced the closure of the South Stream project and the construction of a new gas pipeline with a landing point in Turkey, is expected to significantly change the European energy map. Through the Turkish Stream pipeline, in fact, Russia aims to strengthen its energy relations with Turkey – in search of new supplies to sustain its economic growth – but without blocking access to western European markets, a key point of Gazprom’s export strategies. Moscow’s decision helps to strengthen Turkey’s role at the centre of the Eurasian energy game. In addition to the transit of gas from Russia, Ankara is, in effect, crucial in the construction of the Southern Corridor, the initiative of the European Commission for transporting gas from the Caspian Sea (and, potentially, from the Middle East) to the European markets. Thanks to this role as an intersection, Turkey can contribute significantly to the development of the balance between Brussels and its energy partners.
Based on preliminary details provided by Gazprom, the new pipeline should partly retrace the old South Stream project. Its starting point on Russian territory, in fact, should be the same as the previous project, near Anapa, and its capacity – at least according to official announcements – should also remain at 63 billion cubic meters (bcm) per year, again divided into four lines of 15.75 bcm. For 660 kilometers, the route will remain unchanged, while the last 250 km will be diverted towards the south in order to reach Turkish territory.
The first line of the Turkish Stream pipeline should transport volumes for the Turkish market, while the remaining three lines would be destined to western Europe in an attempt to avoid – at least in part – transiting through Ukrainian territory. To this end, the pipes should land near Kiyikoy, in the European part of Turkey and, from there, should reach Ipsala, near to the Turkish-Greek border, to then connect to a possible European transport network.
Contrary to South Stream, the new project does not provide for the participation of European energy companies, but shall be constructed exclusively by Gazprom, in collaboration with Turkish Botas. The involvement of Italian Saipem in the laying of offshore pipelines is much more likely: last March, in fact, the subsidiary of Eni was awarded contracts for approximately EUR 2.5 bln to construct the entire first South Stream line (and for activities to support the installation of the second line), for which it has already started operations.
The implementation of Turkish Stream should proceed in parallel with an increased transport capacity of Blue Stream, currently the only gas pipeline directly connecting Russia to Turkish territory. According to Gazprom’s plans, the transport capacity expected for Blue Stream, a joint-venture between Eni and the Russian giant, should increase by 3 bcm and should reach a total of 19 bcm in order to cope with the growing demand in Turkey and, at the same time, minimize the risks of transit through Ukraine, through which 14 bcm destined for the European part of Turkey currently transit.
However, in the coming years, Turkey will also be crossed by the Trans Anatolian pipeline (TANAP), the gas pipeline managed by the Azerbaijan energy company Socar in collaboration with Botas, which should transport gas from the Caspian Sea to the Greek-Turkish border and, from there, connect to the Trans Adriatic pipeline (TAP) to land in Italy. In Ankara’s plans, Tanap should help to diversify Turkish supplies, initially thanks to 6 further bcm of gas per year from the offshore oilfield of Shah Deniz II, which should reach Turkey in around 2020.
The natural gas sector is particularly critical for Turkey, mainly due to its total dependence on imports. Domestic consumption has more than doubled within a decade, and is expected to grow further due to economic expansion and attempts to reduce the use of coal to produce electricity. Its partnership with Moscow is for Ankara, which imports 60% of its gas supplies Gazprom.
Meanwhile, Turkey is Russia’s second largest export market outside of the former Soviet Union, after Germany. In an attempt to reduce its dependence on Russian gas and to support European energy diversification strategies, in past years Turkey has played a central role in the process of defining the Southern Corridor, the gas highway initially conceived by the European Commission to transport gas from the Caspian Sea, Iran and Iraq to Europe.
Turkish company Botas should have been among the shareholders of the Nabucco gas pipeline, designed by Brussels to cross the whole of Turkey and to transport Caspian gas to Austria through the eastern Balkans. However, faced with the growing role of Azerbaijan in the regional energy game, the government of Ankara has decided to protect its interests by supporting Baku and helping to bury Nabucco for good in favour of Tanap. In this context, the construction of Turkish Stream helps to reshuffle the cards. On the one hand, Ankara strengthens its strategic position, remaining crucial to Europe for diversifying its supplies and to Azerbaijan for finally reaching the European market, while also becoming essential for Russian attempts to diversify export markets and, above all, for Gazprom’s need to avoid transit through the Ukrainian network.
It is highly likely that the Turkish government will use this powerful situation to maximise its advantages against all energy partners involved in the game. Discounts of over 10% recently applied by Gazprom to gas supplies are an example of the negotiating power currently in the hands of Ankara.
On the other hand, however, the new gas pipeline will help to increase the Turkish market share in the hands of the Russian giant, by partly negating the diversification strategies outlined by Ankara but consolidating the interdependence between the two countries.
The European Union and Azerbaijan are those who would lose as a result of this situation, since, for more than a decade, they have been trying to create strong energy relations thanks to the role of Turkey. In fact, although Russian gas that will reach Turkey through the Turkish Stream pipeline can safely coexist with Azeri volumes transported through TANAP, there is still the possibility that a strong energy partnership between Moscow and Ankara may (intentionally or not) create a bottleneck along the route of the Southern Corridor. crucial almost
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