• Natural Gas News

    Putin: Russia-Turkey Gas Price Dispute Persists

Summary

Turkish imports dropped sharply in January, but Turk Stream will likely boost trade longer term.

by: Dalga Khatinoglu

Posted in:

Natural Gas & LNG News, Europe, Liquified Natural Gas (LNG), Political, Infrastructure, Turk/Turkish Stream, News By Country, Russia, Turkey

Putin: Russia-Turkey Gas Price Dispute Persists

A gas price dispute between Gazprom and Turkey continues, Russian President Vladimir Putin said.

The disagreement is nothing new. Turkish pipeline operator Botas launched international arbitration proceedings against Gazprom in October 2015 due to price dispute and claims of overcharging.

"Turkey insist on some formulas, but Gazprom offers other solutions,” Putin said during a meeting with his counterpart Recep Tayyip Erdogan April 8. Nevertheless, the Russian president predicted a solution will be found.

Ankara’s former energy and minister Berat Albayrak said last May that Turkey and Russia had reached a retroactive agreement for a 10.25% discount on gas price. However, he did not elaborate on whether the arbitration case had been closed on not.

Turkey’s gas intake from Russia declined 34% year-on-year in January. At the same time, its LNG intake rose 19.4% to 2.34bn m3, a new record.

Putin, however, insisted that Russian-Turkish energy cooperation has become truly strategic. “Russia is the largest natural gas suppliers to Turkey. Last year, 24bn m3 was exported. This covers almost half of the country's needs.”

Price is not the only significant factor in the gas trade between the two countries, Putin stated. Russia’s ability to meet Turkish demand hikes during cold winters is also important, he added.

Russia plans to launch the first leg of the 15.75bn m3/yr TurkStream pipeline in late-2019. The infrastructure, which runs beneath the Black Sea, will replace the long transit that carries Russian gas via Ukraine to Turkey.