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    As Relations with Russia Deteriorate, Turkey and Ukraine Discuss Gas

Summary

As relations with Russia deteriorate, Turkey and Ukraine look to each other for energy cooperation

by: Kama Mustafayeva

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Featured Articles, Security of Supply, Political, Intergovernmental agreements, Gas for Transport, Infrastructure, Storage, Pipelines, Blue Stream, Trans-Anatolian Gas Pipeline (TANAP) , Trans Balkan Pipeline, News By Country, Turkey, Ukraine

As Relations with Russia Deteriorate, Turkey and Ukraine Discuss Gas

Ankara and Kiev have announced plans to cooperate on energy including natural gas transit and the use of Ukraine's underground gas storage (UGS) facilities, Turkish media outlets and the Ukrainian government have reported.

According to Turkish newspaper Daily Sabah, Turkey's president, Recep Tayyip Erdogan, and his Ukrainian counterpart, Petro Poroshenko, signed a joint declaration to cooperate on politics, economy, education and tourism in Ankara at a high-level strategic council meeting.

Additionally, the two sides agreed to evaluate gas export projects from Caspian to Europe, Ukraine's government press service said March 10. According to that release, Ukrainian and Turkish energy ministers Vladimir Demchishin and Berat Albayrak discussed ways to to deliver Caspian and Iranian gas to Ukraine as well as the possibility of allowing Turkey to access Ukraine's underground gas storage (UGS) projects.

Further in the energy discussions, the Ukrainian side also expressed a readiness to cooperate in the field of nuclear energy, inviting Turkish specialists to study at Ukrainian training centres, and in mining uranium ore and producing uranium concentrate.

According to the Ukrainian government press release, Turkey also expressed an interest in participating in the privatisation of Ukraine's energy assets, including coal mines.

Turkey and Ukraine likely had fertile ground to discuss cooperation and the strengthening of their energy relations following the deterioration of both countries' relationships with Russia.

Historically, Ukraine has maintained an uneasy relationship with Russian suppliers. In February, Ukrainian state-owned Naftogaz said it was willing to go to court to settle the payment terms of 5mn m³ of gas owed to Gazprom; and, earlier this week, it emerged that Gazprom had cut gas supply to Turkish gas importers once the importers refused to pay a higher price for gas supplied from Gazprom. 

In that context, Ukraine and Turkey's discussion about the UGS projects could be revealing of a wish from both sides to mutually diversify away from Russian supply.

Currently, Turkey imports Russian gas directly via the Blue Stream pipeline, which runs under the Black sea, and via the Trans-Balkan gas pipeline, which passes through Ukraine, Moldova, Romania and Bulgaria.

However, if Turkey is given access to Ukraine's UGS facilities, Turkey could potentially benefit from boosting its storage amounts. Turkey's annual gas consumption is above 45bn m3 a year but the country has a UGS capacity of less than 3bn m3 at present. Accessing Ukraine's underground storage could mean that Turkey could store gas exported via the Trans-Balkan pipeline in Ukraine for winter supply or for another emergency situation.

And, with start-up gas supply from the Caspian via the Trans-Anatolian pipeline scheduled to begin in 2018, Turkey could have excessive amount of gas that could be stored in Ukraine. It would potentially also have the opportunity to re-export that gas to other European countries via Ukraine's gas transportation system. 

The arrangement could behove Ukraine, too, as it ramps up its efforts to pull away from Russian supply. Turkey is the second country Ukraine has held energy talks with in a week. On March 7, Ukraine said 2016 would be a year of intensifying relations between Ukraine and Iran following a meeting in Tehran. During that meeting, Ukraine and Iran also discussed gas projects and ways of bringing Iranian gas to Europe through Ukraine.

 

Kama Mustafayeva