Talks suspended on Russia’s Turkish Stream gas pipeline plan

Russia’s plan for a new undersea route to ship gas to Europe without going through Ukraine has taken another hit with the news that Russia and Turkey have suspended talks for the new Turkish Stream pipeline.

Turkish officials told Reuters yesterday that talks were suspended after Moscow failed to sign off on a key gas price discount agreement.

In February Ankara obtained verbal agreement a 10.25% price discount on the 28-30 billion cubic meters of gas it buys from Russia but a final signature has not been forthcoming.

Russian energy company Gazprom and its Turkish counterpart Botas had six months to sign off on the price but that window lapsed on 29 June without agreement.

According to Reuters, Turkish officials said another sticking point has been Russia’s insistence that Ankara grant permits for the construction work on four planned lines in the project. Turkey has so far only given licenses for the first line.

Russian Energy Minister Alexander Novak said on 29 July that there was a risk construction of the pipeline could be delayed if a related intergovernmental agreement was not signed soon, the Interfax news agency reported.

Earlier this month Gazprom subsidiary South Stream Transport BV, the company developing the pipeline, without warning cancelled the pipe-laying contract with Italian contractor Saipem, throwing the Turkish Stream project into doubt.

The Turkish Stream plan sees Russian natural gas piped under the Black Sea to Turkey and then onward to Europe through Greece.

It replaced an earlier plan, called South Stream, under which the pipeline would land at Burgas, Bulgaria. Russia cancelled South Stream in December 2014 in the face of opposition from the European Union.

Photograph: Pipes for the Turkish Stream offshore pipeline wait at port (South Stream Transport BV)

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