Turkish Stream

12 m.   |  2020-02-24

New Russian-Turkish Project

O n January 8, 2020, Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan launched the Turkish Stream gas pipeline in Istanbul. It is one of the three major projects within the Russian-Turkish cooperation in the energy field together with the Blue Stream gas pipeline [1] and the Akkuyu Nuclear Power Plant [2].

The gas pipeline has a total capacity of 31.5 bil. cubic meters [3] and is envisaged to export Russian natural gas to Turkey across the Black Sea and then to Southern and Southeastern Europe. It’s no coincidence, that Boyko Borissov, Prime Minister of the Republic of Bulgaria and Aleksandar Vucic, President of the Republic of Serbia also attended the opening ceremony [4].

The gas pipeline starts at the coastal area of the city of Anapa stretching more than 93 km. and reaches Turkish Kiyikoy town, Trakya [5]. It consists of two pipelines, one of which is envisaged for meeting the internal energy needs, and the other to export Russian gas to Southern and Southeastern Europe, that is to Bulgaria, Serbia, Hungary and Slovenia through the territory of Turkey.

During his speech at the opening ceremony, Russian President V. Putin called the construction of the gas pipeline “high-technology work”, the offshore part of which was completed within a very short period, at a record speed of 6km per day, and called the gas pipeline “unique deep-see gas transportation system with its unprecedented standards” [6]. Construction of the pipeline’s offshore section started in May 2017, which means, that it was completed within 2 years. It should be noted here, that the maximum depth of the seabed through which the pipeline passes is 2200 meters. 

TurkStream gas pipeline[7]

The construction of the TurkStream is beneficial for Europe, but mostly for Russia and Turkey. Europe’s benefit lies in diversifying the sources and ways of supplying energy resources and in ensuring energy security.

Russian interests

T he pipeline is important for Russia for the following reasons:

  1. Diversification of the export routes of energy resources,
  2. Provision of new markets for energy consumption and/or expansion of existing markets

Before the construction of the TurkStream, Russia provided Turkey with natural gas through the Blue Stream and trans-Baltic gas pipelines, the latter passing through the territories of Ukraine, Moldova, Romania and Bulgaria. Taking into account the acute political controversies between Ukraine and Russia, gas supply to Turkey through Trans-Balkan pipeline is constantly at failure risk. Therefore, with the construction and launch of the TurkStream Russia simultaneously solves two important issues: uninterrupted gas supply to Turkey with income insurance and neutralizing or at least weakening the dependence on neighboring countries in transit issues.

Generally, there is a tendency to replace the onshore pipeline routes with the offshore by Russia in recent decades. It is testified by the following projects already implemented and in the process of implementation:

  1. “Blue Stream” pipeline, which supplies Turkey with gas through the seabed of the Black Sea. It was officially exploited in 2005, but began to operate at full in 2010. Its length amounts to 1213 km. with an annual capacity of 16 bcm/year. The pipeline consists of onshore and offshore (396 kmsections. The onshore sections however pass only through the territories of Russia and Turkey not including any other transit country [8].
  2. “TurkStream” gas pipeline.
  3. “Nord Stream 1” gas pipeline, which was exploited in 2012. It consists of two parallel pipelines, envisaged to supply Germany with gas through the seabed of the Baltic Sea. It has an annual capacity of 55 billion cubic meters [9]։
  4. “Nord Stream 2” gas pipeline, which is also envisaged to supply Germany with gas through the seabed of the Baltic Sea and the construction of which will be completed with some delays because of the US sanctions by the end of 2020 or by the first quarter of 2021 [10].

The change in the Russian gas policy is due to several factors. First is that the onshore gas pipelines pass through the territories of such countries, with which Russia has tough political and economic relations (Ukraine, Poland, Bulgaria, Moldova and so on). Therefore, the guaranteed gas supply may be disrupted because of the controversies with these countries.  Similar case happened in the mid-2000s, when because of the disagreements with Ukraine over the gas price, the uninterrupted supply of the blue gas to Europe was endangered. Not receiving gas from Russia, Ukrainian authorities used the Russian gas passing through their territory to European countries.

Hence, we can say, that gas-supplying countries are somehow dependent on transit countries, which can deprive the supplying country of its revenue by disrupting fuel supply. In other words, being a transit country is somewhat a “blackjack”, which can put pressure on the gas supplying country and get concessions from them. Meanwhile the sea route essentially eliminates this problem, as it allows establishing a direct linkage between fuel supplying and consuming countries, without the influence of other countries.

This problem did not exist in the Soviet era, as Russia together with other transit countries were either in the same state, within the USSR or in the same economic and military-political alliance, in a socialist bloc. After the collapse of the socialist bloc as well as the collapse of the USSR, when the former union republics became independent states, as well as certain political issues arose between the former socialist bloc countries and Russia, the gas supply issue from Russia to Europe was also aggravated. 

Second, the direct infrastructure link between the fuel supplier and consumer allows significant savings by avoiding to pay gas transit fees.

Third, considering the rise in the growth of terrorism, different conflicts and crimes, the safety of onshore pipelines appears under a bigger threat. They may be targeted by terrorists or damaged by various armed conflicts, clashes and subversive acts. Let’s recall the frequent explosions of the gas pipeline to Armenia just in the 1990s in the territory of Georgia. There was the same problem in case of the gas pipeline from Iran to Turkey, passing through the Kurdish populated areas of modern Turkey. Whereas laying the gas pipelines through the seabed almost 100% guarantees the safety of these infrastructures, as for example the 2200-meter deep-sea pipeline is unlikely to be accessible for terrorist or other impeding actions.

Within this context, the TurkStream gas pipeline project was pushed instead of the South Stream project with much larger capacity of 63 billion cubic meters, which envisaged Russian gas transportation to Southern and Central European countries, through both offshore (the Black Sea) and onshore routes through the territories of Bulgaria, Serbia, Hungary, Austria, Italy and Slovenia [11].

Within this project, the Russian natural gas had to be supplied to such economic giants of the European Union, such as Austria and Italy. The South Stream wasn’t implemented because of the delay of the privilege for the construction of the pipeline by Bulgaria (the European Commission was against the project). Russia refused the South Stream in the end of 2014 [12]

What refers to the expansion of the Russian natural gas consumption, there is a viewpoint among the experts [13] that neither the TurkStream nor the Nord Stream 2 will essentially increase the volume of Russian gas consumption in the international market, therefore will not provide additional income for that country, as they are alternative gas pipelines for the offshore gas pipelines to Germany through the territory of Trans-Balkan and Ukraine and there isn’t significant increase in Russian gas demand in the international market. Thus, according to this approach, Russia makes only useless expenses in the construction of these gas pipelines.

Though containing the elements of truth, this view isn’t so clear, as first of all the expansion of technical (infrastructure) capabilities of gas supply cannot help but increase its consumption volumes (in case of Turkey, it could be an increase in gas consumption for both domestic and industrial purposes).  In addition, the newly built gas pipelines exceed the existing ones with their capacity. The capacity of Trans-Balkan gas pipeline is 15 billion cubic meters per annum, whereas the capacity of the TurkStream, as we have already mentioned above, more than twice as much (31.5 bil. Cubic meters). Finally, as it is noted by the Russian authorities, the launch of the newly constructed gas pipelines doesn’t mean the termination of the existing ones. According to the agreement reached, the transit of Russian gas through the territory of Ukraine will go on over the next 5 years  [14].

Turkish interests

T he pipeline is important for Turkey both politically and economically. Politically, Turkey takes another crucial step towards turning the country into a regional energy hub. It significantly increases the role of Turkey and raises its status both in the region and globally, which in its turn, raises the security level of the country.

Economically, Turkey solves the following issues while launching the gas pipeline:

  1. It not only satisfies domestic gas demand of about 24 bil. cubic meters per annum [15], but also significantly increases the consumption capabilities, which has an important role in the development of the country’s economy. As it was already mentioned, the capacity of the TurkStream gas pipeline is 31.5 bil. cubic meters, but only one of its two branches is envisaged for Turkey’s domestic consumption. It turns out, through this pipeline Turkey will get 15.75 bil. cubic meters of natural gas per annum, which makes 65.6% of its demand. At the same time, Turkey gets Russian gas via the Blue Stream and the Trans-Balkan gas pipelines, which fully covers its annual gas needs [16]. Thus, through the implementation of this megaproject Turkey, in addition to fully satisfying its annual gas demand, can receive a large amount of additional blue fuel, which will be used for both the further development of the economy (industry) and for improvement of the population’s living conditions, as well as for gasification of new settlements. In other words, the significant expansion of gas imports by Turkey indicates not only the current great demand for natural fuel, but also the prospects for further development of the industrial section of the economy.
  2. Turkey receives relatively cheap gas from Russia, as gas is sold at a cheaper price to transit countries than to non-transit countries. It also highlights the level of relations between gas supplying and transit countries. According to energy security expert A. Manvelyan, the cost of Russian natural gas for Turkey is $250 for 1000 cubic meters [17]. As a comparison, Turkey imported natural gas from Iran previously, through the gas pipeline with a capacity of 10 bil. cubic meters per annum, however, because of the high price, which was $400 for 1000 cubic meters, later refused it [18].
  3. With the implementation of the project, Turkey provides income from transit duties.

“TurkStream” gas pipeline’s construction  

The interests of Russia and Turkey coincide in the issue of energy carriers, particularly of blue fuel. Turkey is the second largest market for Russian gas consumption after Germany. According to Gazprom, Russia provided about 24 bil. cubic meters of natural gas to Turkey in 2018 [19]. It accounts for about 15% of Russian gas consumed in Western European market (162.39 bil. cubic meters) [20] .

The importance of Russia to Turkey is being the latter’s number one gas supplier, which makes it uninterrupted and cheap. Even after the crash of the Russian IL-20 aircraft in Syria [21] the Russian gas supply didn’t stop. Russia’s role is further strengthened with the launch of the Turk Stream.

[1] Although the gas pipeline was officially launched in 2005, it has actually started operating since 2003. https://energybase.ru/pipeline/blue-stream

[2] Currently, this project is under implementation.  According to experts, the first power unit of the nuclear power plant will be put into exploitation in 2023. Simavoryan A., The project of Akkuyu NPP in Turkey

[3] https://www.gazprom.ru/projects/turk-stream/

[4] Церемония ввода в эксплуатацию газопровода «Турецкий поток»

[5] http://turkstream.info/ru/project/

[6] Церемония ввода в эксплуатацию газопровода «Турецкий поток»

[7] According to the initial version of the project the TurkStream gas pipeline had to pass through the territory of Greece, as it’s shown on the map, but as a result of redesign of the project, Greece was replaced by Bulgaria.

[8] See in details https://energybase.ru/pipeline/blue-stream

[9] See Mkrtchyan, J., “Will the Nord Stream-2 reach Germany?”

[10] Пресс-конференция по итогам российско-германских переговоров

[11] Миллер объявил о закрытии проекта «Южный поток»

[12] Путин заявил о невозможности строительства «Южного потока»

[13] See, e.g., Гурков А., Комментарий: Смысл и бессмыслие "Турецкого потока"

[14] Пресс-конференция по итогам российско-германских переговоров

[15] Ханов Михаил, "Турецкий поток": изменит ли газопровод энергетический рынок в Европе?

[16] Same place.

[17] Security factor. Energy security

[18] Same place.

[19] http://www.gazpromexport.ru/statistics/

[20] Same place.

[21] See: На границе с Турцией сбили российский бомбардировщик Су-24