Gazprom Advances South Stream Loan
Russian export monopoly Gazprom approved a €2.142bn ($2.5bn) loan to South Stream Transport to build the TurkStream gas pipeline, the Russian gas holding said. The loan is to top up working capital with annual 3.98% interest, and is repayable no later than December 30, 2023. Gazprom owns half of Dutch-registered South Stream; Italian Eni has a fifth; and German Wintershall and French EDF each have 15%.
In late May, Gazprom and the government of the Turkish Republic signed a protocol on the overland section of the transit line of the Turkish Stream gas pipeline to supply Russian gas to European consumers, which would defeat the Bulgarian prime minister's hope for a pipeline under the Black Sea.
Russia's previous attempt at gas deliveries directly to Bulgaria cost it almost a billion dollars when the project was cancelled in 2014. Russian television broadcasts June 3 said that Bulgaria had pulled out of the South Stream project under European Commission pressure to limit imports of Russian gas, although technically it was cancelled when the European Commission faulted the Bulgarian procurement process.
Gazprom and Turkish transmission system operator Botas have agreed the basic conditions and parameters for the construction, which will be carried out by TurkAkin Gaz Tasima, their 50-50 joint venture.
Earlier Gazprom said it was negotiating the route of the second branch of TurkStream in Turkey, but that its route into southern Europe was not fixed. The two main options are being discussed in accordance with the procedures in the European Union and the European Commission (EC), it said, although observers note that the anti-trust settlement with the EC will ultimately make it much easier for third parties also to sell gas in Bulgaria. The new line could go into Bulgaria from Turkey or west into Greece, in both cases avoiding the Russia-Ukraine-Romania route.
Russia's prime minister Dmitry Medvedev held a telephone conversation with his Turkish counterpart Binali Yildirim, during which the two heads of government discussed the construction of the Akkuyu nuclear power plant and TurkStream gas pipeline.
As reported on the website of the government of the Russian Federation, Medvedev and Yildirim noted the importance of intensifying co-operation with interested ministries and agencies of Russia and Turkey in order to create favourable conditions for the expansion of bilateral co-operation in a wide range of areas.
Gazprom began construction of the 930-km offshore section of TurkStream in May 2017 and the first string was completed in late April this year. The first line will be intended for the Turkish market, the second for Europe, and each will be able to carry 15.75bn m³/yr when commissioned in late 2019.