Putin and Erdogan hold talks over pressing on with ‘Turkish Stream’ project

Russian President Vladimir Putin and Turkish President Tayyip Erdogan yesterday discussed pressing on with the "Turkish Stream" gas project, which will replace the South Stream project that was to have transported Russian gas to southern Europe using a pipeline under the Black Sea.  

Gazprom and the Russian government were planning South Stream as a way of delivering gas to Europe without passing through the Ukraine. In the past when the Russians have interrupted supplies to the Ukraine, gas supply would also be halted to Bulgaria, a country that is largely dependent on Russian energy.  

However, Bulgaria suspended work on South Stream after pressure from the European Commission, which declared the deal illegal under EU competition law, and from the US, because of its sanctions imposed on Russian companies. 

The Kremlin now hopes to build Turkish Stream, a replacement that would go from western Siberia under the Black Sea and through Turkey to a hub on the Turkish-Greek border by the end of 2016. It would bypass both Bulgaria and Ukraine. 

Turkish officials have said the plans are unlikely to progress as quickly as Russia would like, given Ankara’s concerns about overdependence on Russian energy. These fears may, however, be eased by the 1,850km Trans-Anatolian Natural Gas Pipeline (TANAP) pipeline that brings gas from Azerbaijan’s Caspian Sea wells through Georgia. Work on this $11bn scheme, which is due to be completed in 2018, started yesterday. 

Meanwhile, the fall-out from the South Stream cancellation continues. Gazprom is still paying Italian oil and gas contractor Saipem for the hire of two pipe-laying ships, even though they’re not being used. Gazprom said last week that it had paid $600m on the project in the past six months. 

Another loser from the abortive scheme is Bulgaria, which has lost its hoped for energy security. Prime Minister Boyko Borissov recently asked Maros Sefcovic, the European commissioner in charge of energy policy, to lobby Russia to re-launch the South Stream project. 

At a press conference in Brussels in advance of a visit to Moscow, Sefcovic said: "One of my questions to my Russian counterparts will be how they see the current situation [regarding South Stream], what are their plans, how they want to address this complex issue of supplies of Russian gas to Europe." 

Aleksey Miller, the chief executive of Gazprom, dismissed the possibility of reviving the scheme and said the Russian gas monopoly preferred Turkey over Bulgaria as a gas transit country. 

The EU imports about 27% of its energy from Russia. The argument over the South Stream plan split the union between southern states such as Italy and Bulgaria that were in favour of it and the northern countries that were opposed.  

Photograph: Vladimir Putin during a state visit to Ankara last year (Source: The Kremlin)