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    The Turkish Stream Mystery



As Turkish Stream's future appears up in the air, Ioannis Michaletos looks at the background players who seem to be influencing its fate

by: Ioannis Michaletos

Posted in:

Liquefied Natural Gas (LNG), Top Stories, Pipelines, Security of Supply, Interconnector-Turkey-Greece-Italy (ITGI) , Nord Stream Pipeline, Nord Stream 2, Trans-Adriatic Pipeline (TAP) , Trans-Anatolian Gas Pipeline (TANAP) , Turk/Turkish Stream, Germany, Russia, Turkey, France, Greece, Italy, Netherlands, Balkans/SEE Focus

The Turkish Stream Mystery

The shooting down of a Russian SU-24 bomber by a Turkish F-16 fighter jet last week may well have put an end to the design of the Turkish Stream pipeline project as Moscow prepares a set of sanctions against Ankara. But the event may only have an effect on Turkish Stream in its originally proposed incarnation: Greece, Italy and France are boosting efforts to revive Turkish Stream, albeit in a different route.

The latest dramatic downturn of Russian-Turkish relations has in effect stopped or at least delayed any final investment decision regarding the Turkish Stream project (also sometimes known as "TurkStream"). As diplomatic relations and bilateral visits between the two countries have been cancelled, it's not certain whether talks could be revived soon, judging by both sides' mutual animosity and the geopolitical antagonism in Syria.

At the same time, there are certain initiatives of interest that could play a positive role in the future of TurkStream. France's EDF and Italy's Edison have, since early November, expressed an unofficial but strong interest in supporting a route of the pipeline from Turkey to Greece and then via a revived ITGI to Italy with gas flow up to France.

Recently a Russian deputy Prime Minister Arkady Dvorkovich paid a visit to Athens where he reportedly gave a positive nod to the revised and unofficial plan. Nevertheless, the deputy prime minister invited Greek energy minister Panos Skourletis to Moscow in early December for discussions that will challenge the EDF-Edison plans. At that meeting, both officials will discuss the project's development with the stakeholders of TurkStream project. Those stakeholders, namely Gazprom's executives, are opposing such a route, betting their investment focus on the Tesla route, a Project of Common Interest (PCI), as recently selected by the EU's Commission.

Back in October, head of Gazprom Alexey Miller met with the CEO of Edison, Bruno Lescoeur, to discuss the possibility of a new Turkish Stream route. However, some reports say that Gazprom considers the Greek government the "weak link" in a complicated project that needs to include the materialisation of ITGI, a project that will have a significant cost and which will run in parallel with the more mature TAP project.

Gazprom is very much afraid that this new Turkish Stream route will cost time and money and will clash eventually with the EU's policies.

On the other hand, Edison may have its own reasons for favouring a new route for Turkish Stream. Edison is a subsidiary of France's EDF , one of the pillars of the French economy and a company that is supported wholeheartedly by Francois Hollande’s Presidency. So Edison looks likely to have strong backers for its Turkish Stream vision in Paris; France does not want to be sidelined by the new "Ostpolitik" of Berlin which now promotes stronger energy ties with Gazprom via its Nord Stream-2 project.

Also in October, Turkish Stream got backing from another influential source, Gertjan Lankhorst,President of Eurogas. Eurogas is an association representing the European gas wholesale, retail and distribution, and sectors. Mr. Lankhorst is also CEO of the Dutch GasTerra Company which owns 9% of Nord Stream AG, and whose major shareholder is Shell Plc, one of the stakeholders in the Nord Stream 2 project.

"If it [Turkish Stream] brings gas into Europe, you have to look at whether the partners in that project comply to European regulations, and if that is the case, then be happy with that project as well," Sputnik reported Mr. Lankhorst as saying at the time.

He also said Europe should welcome any added source of the gas commodity in every form, whether via LNG or pipeline. He also commented that the EU regulations should not favour one project against another but welcome all private initiatives and support infrastructure. 

It looks like, right now, Germany and France are vying on who is going to take the bulk of Russian gas supply, thus raising either country's position as the main re-distributor of gas to the rest of Europe. TurkStream, coupled with additional sources such as TANAP-TAP and LNG imports, plays a major part in each country's aim.

Greece's role as a transit space has its importance. But the key to the future of Turkish Stream lies in the outcome of the Russian-Turkish brinkmanship. 

Ioannis Michaletos