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TurkStream; Russia, Turkey Eye Europe Market

(Monday, January 21, 2019) 16:08

The offshore section of TurkStream or Turkish Stream, a natural gas pipeline running from Russia to Turkey, was recently finalized in the presence of Russian and Turkish presidents in Istanbul. The project crossed its most significant phase.

Strategically and economically speaking, this gas pipeline is of paramount significance. The pipeline would connect Russia and Turkey via the Black Sea. TurkStream will not only bring Ankara and Moscow closer together, but also it would provide Russia and Turkey a new chance for exporting energy to Europe. That comes at a time the United States is opposing the completion of the Nord Stream 2 pipeline project, which is planned to carry Russia's gas to Europe and Germany via the Baltic Sea. Therefore, TurkStream takes up added significance, Shana wrote.

**TurkStream Pipeline

The TurkStream pipeline has so far seen ups and downs. Its construction came to a halt in November 2015 following the downing of a Russian warplane by Turkey along the border with Syria.

The pipeline is set to carry natural gas from Russkaya compressor station near Anapa in Krasnodar Region across the Black Sea to Kıyıköy on the Turkish Thrace coast.

Composed of two 930-km pipelines, TurkStream is able to supply over 30bcm/year of natural gas from Russia to supply Turkey's needs.

After the construction of the offshore section, the onshore section on Turkey's soil remains to be constructed for this project to be completed. According to schedule, Russia's gas is planned to be exported to Turkey via this pipeline by end-2019.

Although Moscow and Ankara are the main parties to the TurkStream pipeline, this project will not be limited to these two nations. After carrying gas from Russia to Turkey, it is forecast to take gas to other European countries like Bulgaria, Serbia, Greece and Italy. In fact, once this project becomes operational Russia's gas will go to southern and southeastern Europe via Turkey's western borders.

**Advantages for Russia

Over recent years, energy-related equations have been instrumental in expanding political and economic ties between Russia and Turkey. Russia is the second gas supplier to Turkey. Ankara receives 76% of Moscow's total energy exports. Turkey signed a deal in 1986 to buy 6 bcm/year of natural gas from Russia for 25 years. A similar agreement was signed in 1998 for 8bmc of natural gas. In addition to bilateral energy deals, Russia and Turkey have lots of projects to carry energy from Russia to Europe via Turkey's territory. Meantime, cooperation between the two countries in the energy sector is not limited to fossil energies. Over the past years, Moscow has expressed readiness to sell atomic reactors to Turkey and fuel them. Turkey has welcomed the offer.

Construction and operation of the TurkStream gas pipeline will enable Russia to reduce its dependence on the Ukraine pipeline for carrying gas to Europe. That is a big advantage for diversification of energy resources, which has been a policy followed by Russia vis-à-vis Europe. Europe is interested in laying out the Nabucco pipeline and using gas sources in Turkmenistan and Azerbaijan, but Russia asserts it can realize its objectives of diversifying sources of energy supply to Europe through diversifying gas pipelines as well as gas transmission routes to Europe.

In a bid to upgrade the security of gas supply to Europe, Russia has made efforts to diversify routes of gas transfer to Europe, one of which is the TurkStream pipeline project. This route can diversify Russia's gas exports to Europe and avoid to a great extent damage from possible interruption in gas exports by the countries located on the pipeline route. Therefore, for the following reasons Russia attaches great significance to Turkey.

First, Russia views Turkey as a very important corridor to carry its energy to markets in Europe, Middle East and North Africa and therefore shows interest in the expansion of the pipeline linking the two nations. Materialization of this objective will allow the Russians to carry their energy to the Mediterranean without having to cross the Bosporus Strait. Therefore, Turkey can become the route for the transfer of Russia's energy to Europe.

Second, Ankara is able to obstruct the construction of pipelines that would carry oil and gas from the Caspian Sea and Middle East regions to Europe. In fact, in light of Europe's interest in diversifying its oil and gas supply sources, using the Turkey route will help improve Russia's standing in rivalry with other pipelines like Nabucco.

Therefore, Turkey is of high significance for Russia in terms of energy transfer.

On the political front, while Russia is making efforts to distance Turkey away from NATO towards itself, economic benefits and mutual needs in the energy sector could serve as an effective tool in Russia's hands to push ahead with its policy.

**Advantages for Turkey

Turkey is also enjoying benefits from the TurkStream project. In 2008, the Turkish Foreign Ministry released a national energy strategy, which laid emphasis on Turkey growing into the main hub of energy transmission to Europe in Central Asia, Caucasus, the Middle East, the Balkans and Russia.

Turkey has since invested in realizing this objective and plans under its long-term economic and political perspective to turn Ceyhan Port into an energy terminal in the region. To that effect, Turkey has in recent years been a major party to discussions on energy transfer to Europe. Therefore, Russia is of strategic importance in the energy sector for Turkey for at least two reasons as follows:

First, Russia provides the bulk of Turkey's energy needs. Simultaneously with the pace of industrial production growth in Turkey, this country has seen its energy consumption grow. Therefore, amid conditions of fast growth in energy demand in Turkey, energy giant Russia can play a significant role in oil and gas supply to Turkey. That is particularly important, as in their view, Middle East nations cannot be a stable source of energy for Turkey due to instability and insecurity.

The second reason stems from Russia's significant role in Turkey's energy strategy. Turkey is willing to be an intermediary nation in oil and gas exports from Russia and the Caspian Sea region to Europe. Ankara is determined to become the main focal point of transit between oil and gas producing areas and markets in Europe. In case this strategy of Turkey reaches a result, it can then turn into the vital link in the energy stream which connects the Caspian Sea region to Europe. Therefore, under conditions where Russia remains the most important and the main supplier of energy to the European Union, the Turks know pretty well that it is impossible without cooperation with Russia.

Therefore, the TurkStream project is instrumental in supplying Turkey's natural gas demand and will be able to supply necessary gas supply to Turkey's Marmaris where industrial production is high.

Furthermore, Turkey is currently purchasing more than 14 bcm of natural gas via Ukraine, Moldavia, Romania and Bulgaria, while the TurkStream project can provide natural gas at a much lower price because natural gas would be directly pumped into Turkey via TurkStream.

In addition to that, the TurkStream pipeline will guarantee the security of transmission of gas to Turkey without being affected by relations between those countries and Turkey or Russia.

When part of gas supply to Europe goes via Turkey's territory, it would help this country bolster its strategic standing, which would turn Turkey into a bridge for energy exports from producers to consumers. Turkey has in the past years worked on other projects like the Trans-Anatolian Natural Gas Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP) for energy transmission through its territory.

If Turkey becomes the energy hub in the region it would mean Turkey's political standing has strengthened vis-à-vis European nations, which would influence future interactions between Ankara and Brussels and even Turkey's EU membership bid.

Courtesy of Iran Petroleum

By Shuaib Bahman

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