Putin offers Greece pipeline financing help

GAZPROM

Russia said it is ready to consider providing finance to Greek companies that will participate in the construction of the gas pipeline continuing the Turkish Stream.

Gazprom wants to redirect most of the Ukrainian transit flow via the new Turkish/Greek pipeline by 2019


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ATHENS – Greece’s Prime Minister Alexis Tsipras and Russian President Vladimir Putin discussed a natural gas pipeline across Greek territory on May 7, the same day Russian gas monopoly Gazprom and Ankara reached an agreement on operational commissioning and the start of gas deliveries via Turkish Stream in December 2016.

Putin told Tsipras by phone Russia is ready to consider providing finance to Greek companies that will participate in the construction of the gas pipeline continuing the Turkish Stream, the Kremlin said in a statement. “In this connection, the Russian side reaffirmed its readiness to consider the provision of funding the Greek public and private companies that will be involved in this project,” the Kremlin said.

Tsipras will meet again with Putin in Saint Petersburg on June 18-20, where the Greek premier will participate in an international business forum.

Putin and Tsipras spoke a day before US State Department envoy Amos J Hochstein met with Greek Minister of Production Reconstruction Panagiotis Lafazanis in Athens to discuss “mutual energy interests”. The US has made no secret of their wish for Greece to decline to host gas from the pipeline proposed by Gazprom, saying Athens should reduce its reliance on Russian gas supplies. However, Lafazanis told reporters after the meeting with Hochstein on May 8 that Greece “supports the transit of a pipeline across its territory that will reach the Greek-Turkish border and will carry Russian natural gas. We support this project because we believe it is beneficial for the Greek people, because we believe that it will support the partnership and energy security in our region and Europe”.

Gazprom wants to reduce transit flows through Ukraine. In 2019, the 10-year contract with Ukraine, which includes the transit obligations, expires and Gazprom wants to redirect most of that flow via this Turkish/Greek pipeline, Alexei Kokin, a senior oil and gas analyst at UralSib Financial Corp, told New Europe on May 7.

Turkish Stream is to replace the scrapped South Stream project. But Kokin said the new pipeline “is not realistic”. “It’s not about Turkey or Greece. It’s about European customers,” he said, adding that about 47 billion cubic metres is supposed to reach Europe via this new pipeline and Gazprom would have to first agree and sign long-term supply contracts for this amount.

However, even if Gazprom starts signing contracts, then once again the European Union will interfere and demand that Gazprom grants access to third parties to the EU segment of this pipeline, Kokin said. “But the biggest problem at this stage is getting the supply contracts,” he noted.

Kokin told New Europe that the new project will affect most Southeastern and Central European countries. “Most of them will have to be persuaded to sign new deals with Gazprom. The preliminary work is not something that can be done overnight and I doubt that Gazprom will be able to launch this pipeline by the time the Ukrainian transit contract expires,” Kokin said. “At this point what we see is much talk between Russia and Turkey, Russia and Greece about the route of the pipeline but nothing about the supply contracts.”

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Previously on Energy Insider:

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