Turkey says Gazprom could start Turkish Stream construction this month

KAYSERİ - Reuters

Russia’s Gazprom is likely to start the construction of a planned gas pipeline to Turkey by the end of this month, Turkish Energy Minister Taner Yıldız told Reuters, adding that Ankara is considering becoming an equity partner in the project.

“Once the information regarding the coordinates of the pipeline are received, the permits granted and the talks finalized, construction could begin by the end of the month,” said Yıldız, who will be leaving his post after this weekend’s parliamentary elections.

In December, Russia scrapped its $40 billion South Stream pipeline project which would have supplied gas to southern Europe without crossing Ukraine because of objections from the European Union on competition grounds.

Moscow is now pressing ahead with an alternative pipeline dubbed Turkish Stream, with the aim of delivering 63 billion cubic meters (bcm) of gas per year by 2020.

The pipeline will consist of four lines, which each have an annual capacity of 15.75 bcm, with the first line reaching Turkey.

Gazprom hopes to create a gas hub at the Turkish-Greek border for transit to Europe. Yıldız said instead of acting as ‘just a transit hub’ in the project, Turkey was keen to play a bigger role.

“We are talking about partnership and ownership here. We need to set up the mechanism very carefully for this. We are looking to become a partner in the costs” Yıldız said.

Turkey is heavily dependent on Russia for natural gas. Last year it bought 27.4 bcm of gas through the Blue Stream and Transbalkan pipeline, known as the Western line in Turkey. That figure is equivalent to more than half of its gas imports.

Turkmen gas

Dependent on imports for almost all of its energy needs, Ankara has worked to diversify its energy suppliers.
Yıldız said Turkey was keen to buy more gas from Turkmenistan, and private companies have already agreed to buy 2 bcm of Turkmen gas via Iran through a swap deal.

“We have held talks with Iran on this and they agreed as well. Because there is no direct pipeline from Turkmenistan right now, it will be a swap deal,” Yıldız said.

He said he wanted to see Turkmen gas imported through private firms.

“Right now the share of the private companies in gas importing is around 20 percent. We want this to go higher. We would like to buy 8 to 10 bcm from Turkmenistan via private companies,” he said.

Crude flow from Iraqi Kurdistan to Turkey’s Mediterranean port of Ceyhan continued at a rate of 650,000 barrels per day (bpd), Yıldız said, including the oil allocated to Iraq’s state oil marketer SOMO.

Allocation of crude oil to SOMO has seen a three-day halt earlier this week, causing concern among traders and buyers of Iraqi crude as it came at a time of high tensions between Baghdad and Arbil.

“As the oil prices are falling, agreement of Baghdad and Arbil is more important than ever,” he said.