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    TurkStream Officially Launched (Update)


The event was marked by an Istanbul ceremony attended by Russia and Turkey's leaders.

by: Joseph Murphy, David O'Byrne

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Natural Gas & LNG News, Europe, Premium, Corporate, Import/Export, Infrastructure, Pipelines, Turk/Turkish Stream, News By Country, Russia, Turkey

TurkStream Officially Launched (Update)

(Updates with quotes, analysis)

Turkey and Russia formally inaugurated the 31.5bn m³/yr TurkStream pipeline January 8 in a ceremony in Istanbul. It was attended by the two countries' presidents along with the president of Serbia and the prime minister of Bulgaria.

Both Russian president Vladimir Putin and Turkish president Tayyip Erdogan gave speeches in which they stressed that the realisation of TurkStream was the result of the close level of co-operation between Turkey and Russia.

"We expect in the future to complete many more such energy projects in co-operation with Turkey," said Putin, while his energy minister Alexander Novak pointed out that Russian has been a reliable supplier of gas to Turkey for over 30 years.

Erdogan for his part pointed out the benefits of close co-operation, as opposed to the confrontational politics which has recently threatened to destabilise the region.  

"Tensions are at an undesired level – we don't want to see the region turned into a stage for proxy wars," he said pointing out that as a gas transit route Turkey could contribute to regional stability.

Flows start, but at what rate?

Sakir Arikan, the CEO of TurkStream's onshore section, told NGW that commercial gas flow had started through both the strings. "Flow to Botas' transmission system is normal for this time of year, while flow to Bulgaria is low, but still on a commercial basis," he said confirming that all the testing work on the export string to Bulgaria had been completed.
The two lines replace the Transbalkan pipeline running through Ukraine, Moldova, Romania and Bulgaria to Turkey.

One string is connected to Turkey's national transit grid where it will continue to supply up to 14bn m³/yr of gas under nine separate contracts, supplied by Transbalkan.

The second string bypasses Turkey's transit grid and goes directly to the border with Bulgaria where it connects to the Bulgarian grid at the Strandzha 2 connection. With construction of the next section of TurkStream across Bulgaria not expected to be completed until May, it is unclear how much gas will be transited to Bulgaria before then.

Similarly it is unclear how much gas TurkStream will be delivering to Turkey in the near future. Russian exports to Turkey through Transbalkan have been low for more than 18 months, as the six private importers, which together account for 10bn m³/yr, were undercut by Turkey’s state gas importer Botas which has been importing cheap cargoes of spot LNG.

Gas import data for October published last month by Turkish energy market regulator EPDK shows Turkish gas imports for January-October totalling 35.86bn m³, down 9.5% on the first ten months of 2018. Imports from Russia over the same period were down 36.9% at 12.22bn m³, with Botas' imports down 15.4% at 11.1bn m³, and private imports down 82% on the year at only 1.1bn m³. The combined take or pay debts of the six private importers are reported to exceed $2bn.

Analysts had assumed that Moscow had been tolerating the problem pending the completion of TurkStream but neither Ankara nor Moscow made any public comment on the issue. However with Turkish contracts for 8bn m³/yr of Russian gas timing out 2021-2022, followed by a 16bn m³/yr contract held by Botas in 2025. both sides may prefer to delay a solution until renewal terms have been agreed.