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    Reaching the EU Gas Entry Point: Race for Hitting Greece Border Speeds Up

Summary

Russia's gas monopoly Gazprom promises to reach Turkey-Greece board and set gas hub before Caspian gas from Shah Deniz flow to Turkey

by: Kama Mustafayeva

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Featured Articles, Pipelines, Security of Supply, Trans-Anatolian Gas Pipeline (TANAP) , Turk/Turkish Stream, News By Country, Turkey, Caspian Focus

Reaching the EU Gas Entry Point: Race for Hitting Greece Border Speeds Up

Turkey at last openly admitted that Russia’s proposed new gas export line – so called “ Turkish Stream” will be competing “The Southern Gas Corridor” and its major section, that will be built in Turkish territory – Trans Anatolian pipeline (TANAP) .

Commenting on recent talks with Gazprom's top official Alexey Miller on Turkish television network NTV, Turkish energy minister Taner Yildiz said that “after defining the Turkish Stream route the two pipeline will start friendly (healthy) competition”.

"We have also agreed … in principle that we will move on to take more solid steps towards the new gas route through Turkey, instead of having non-binding agreements," Yildiz said.  

In December, Russian President Vladimir Putin scrapped the South Stream natural gas pipeline project planned to pass through Bulgaria to Europe. Instead he announced a new natural gas pipeline route through Turkey with further setting up a natural gas hub on the Turkish-Greek border.

According to Yildiz, the parties plan to define the onshore pipeline route in northwest of Turkey in Thrace and start construction of the first line by the end of 2016.

"The project named 'Turkish Stream' is planned to carry 63 billion cubic meters of natural gas annually. We aim to begin construction before the end of 2016," Anadoly agency quoted Yildiz as saying.  

Gazprom meanwhile distributed the controversial statement, in which gas monopoly said that it has scheduled to start deliver first gas to Turkey by the end of 2016.

A new route of the pipeline has been approved during the meeting in Ankara, Gazprom said in the statement.

The four strings with an aggregate capacity of 63 billion cubic meters will run 660 kilometers within the old corridor of the South Stream project and 250 kilometers – within a new corridor towards the European part of Turkey. The first string’s throughput capacity of 15.75 billion cubic meters will be exclusively intended for Turkish consumers.

"Our [Gazprom and Botas] priorities – to study the route’s options in Turkey, to define the location of the landfall facilities, gas delivery points for Turkish consumers and border crossings between Turkey and Greece. We agreed to plan our work in such a way that would allow us to sign an Intergovernmental Agreement on the gas pipeline in the second quarter this year; therefore the first gas would come to Turkey in December 2016. Considering the state of readiness of the Russkaya compressor station and the pipeline’s offshore section, this deadline is absolutely real,” the statement quoted Gazprom boss as saying.

All these recent developments around new Russian proposed pipeline set uncertainties and rise question in Baku.

The Azeri government officials never said openly that they had seen competition and any danger for TANAP from new Russian plans and generally attempt to avoid any comment on the matter. 

However a stream of comments and analysis in pro-government media supporting TANAP raising questions around Russia’s new plans are a sign of the anxiety of official Baku. Gazprom ‘s aim to reach the Greek border with its proposed pipeline before TANAP add even more concerns.

SOCAR sources who did not wish to be named said that TANAP plans remain unchanged and “everything is going on under the planned schedule”.

In March SOCAR and Botas plan to hold TANAP’s ground breaking ceremony, which will give an official start of the construction of the line with the initial capacity of 16 billion cubic meters of gas a year.

In April, the partners will move on into actual construction targeting to completion by late 2018 to be ready to deliver first gas from Shah Deniz-2 to Turkey. The $10-11 billion TANAP will link up with Trans-Adriatic Pipeline (TAP) on the Turkish-Greek border and pump natural gas to Europe in 2020.

Meanwhile there are many doubts about Gazprom’s announced schedule as well as overall viability of Russia’s latest gas pipeline initiative coupled with its proposed natural gas trading hub on the Turkey-Greek border, the sources said.

There are no final intergovernmental and commercial agreements for Turkish Stream yet signed to make real first gas delivery by the end of next year.  Promises to complete all four planned strings of Turkish Stream by 2019 aiming to re-route all gas export currently going through Ukraine via new direction, appear unreasonable according to the local analysts in Baku commenting to Natural Gas Europe.

From Russia’s perspective,Turkish Stream is of course a rival project to the Southern Corridor, aiming to gain control over natural gas flows from Turkey into the EU, and therefore undermining the strategic rationale of the Southern Corridor, commented Matthew Bryza, former US ambassador to Azerbaijan, Director of the International Centre for Defense Studies in Tallinn, to Natural Gas Europe.

For Turkey however, Turkish Stream could impact Turkey’s strategic significance by undercutting the Southern Corridor, especially by providing Russia greater control over Turkey’s own independence as a potential gas trading hub.  

Bryza also questioned Russia’s capability in current circumstances to implement Turkish Stream. “President Putin knows this, and is bluffing”, he said adding that even if Turkish Stream were to succeed, it would be unable to stop the Southern Corridor from moving forward, given the latter’s considerable political and commercial momentum.

Kama Mustafayeva