Russia & Turkey - Aerial Combat and Energy Security
The aftermath of Turkey’s shooting down of a Russian warplane close to the Turkish-Syrian border on Tuesday morning could well have profound consequences for one of Europe’s most strategic energy relationships.
If Russia’s immediate anger at the downing of its Sukhoi-24 bomber by two Turkish F-16s in the skies over the Syria-Turkey borderlands is anything to go by, Moscow will likely seek to take some kind of retaliatory action against Turkey.
Assuming Russia does not make any direct military response, it has two main options: restrict trade or take indirect military action.
Russia’s conventional trade with Turkey essentially involves the sale of Russian gas and investment in Turkish nuclear facilities. Limiting either of these would hurt Russia as much as Turkey. Turkey buys close to 30 bcm of gas from Russia each year, and this year Gazprom can expect to secure around $9 billion from its sales to Turkey. As for Russia’s involvement in developing Turkey’s first nuclear power station at Akkuyu, it would set back Turkey’s hopes for alternative energy development significantly if Russia were to pull out. But it should be noted that Russia’s Ros-Atom has already spent some $3bn on developing the $22 bn project.
Moreover, any termination of gas supplies to Turkey, or any withdrawal from Akkuyu, would send very bad signals to Russia’s other trading partners in Europe. If gas supplies were to be reduced or halted, it would not just be Turkey that would consider Russia to be an unreliable supplier. The European Commission is already sufficiently worried about European reliance on Russian gas imports that it wants to ensure that alternative supplies can be made available to Europe in an emergency and that Europe possesses the internal gas infrastructure to distribute such alternative supplies throughout the continent, particularly to those countries in central and southern Europe that are now largely or wholly dependent on imports from Russia for their gas supplies.
A more likely development were Russia to respond actively rather than verbally to the Sukhoi-24 incident -- and it should be stated that at this stage there really is no way of knowing for sure how Russia will respond once it has voiced its initial indignation -- would be to halt current negotiations concerning the development of a new gasline to Turkey, the planned 31.5 bcm/y Turkish Stream project, and on the price of gas currently being supplied to Turkey.
If it chose to cancel Turkish Stream outright, Moscow would, in effect be writing off at least $2bn spent or committed on physical pipe for the project, much of which has already been delivered to the Bulgarian port of Varna since it was originally ordered for the South Stream project that Turkish Stream replaced. But it would be saving itself perhaps $8-10 bn in further expenditure on delivering the 900-km pipe and its 180-km onward extension to Turkey’s border with Greece, a potentially useful gain at a time of relatively low gas prices and uncertainties as to how Turkish Stream would actually be able to deliver gas to mainstream European customers beyond Turkey.
If Gazprom decided to play tough in price negotiations for the bulk of the gas it supplies to Turkey’s state enterprise, Botas, the logical result would be for Turkey to intensify its efforts to expand import of gas from alternative suppliers. In this regard, statements made last week by Ashti Hawrami, Minister of Energy in the Kurdish Regional Government in northern Iraq, and Tony Hayward, the Chairman of the Anglo-Turkish Genel Energy company, that Kurdistan-Iraq expects to be in a position to start delivering up to 10 bcm a year to Turkey in three or four years’ time, and double that amount in the early 2020s, assume considerable significance.
Just as Russia’s President Vladimir Putin has used fierce rhetoric against Turkey for, as he put it, siding with terrorists in shooting down a Russian warplane, so too has Turkish President Recep Tayyip Erdogan used equally fierce language. Speaking on 8 October, after previous reports that Russian warplanes had overflown Turkey, Erdogan warned that Russian incursions into Turkish airspace could cost Moscow its massive gas export and nuclear construction contracts. "We are Russia's number one natural gas consumer. Losing Turkey would be a serious loss for Russia. If necessary, Turkey can get its natural gas from many different places," Erdogan said.
In the aftermath of the Sukhoi-24 downing, both Turkish and Russian thoughts will naturally turn to energy relations and their importance for both countries. But at the back of their minds may lurk some far more worrisome thoughts. Moscow once gave covert support to the PKK militants who waged a brutal insurgency against the Turkish state from 1984 until 1999 and again from 2004 to 2012. Until July, a ceasefire seemed to be holding, with serious peace negotiations under way. But the PKK and the Turkish state are once again at war and, in the first weeks of this renewed war in July and August, PKK guerrillas attacked Turkish oil and gas pipelines on at least four occasions and a freight train carrying pipes for a new gasline from Azerbaijan on a fifth occasion.
In addition, while the PKK claimed responsibility for a major attack on the giant Baku-Tbilisi-Ceyhan oil pipeline on 5/6 August 2008, subsequent information has revealed that it was a highly sophisticated cyber attack, conducted by computer rather than explosives, and, most worrisome of all, carried out just 36 hours before Russia and Turkey’s neighbour, Georgia, found themselves in a war preceded by a massive Russian cyber assault on Georgia.
By John Roberts, Chief Analyst, Natural Gas Europe.