Turkey approves Russia’s pipeline to Europe, but EU has the last word

GAZPROM

Gazprom has received through diplomatic channels a construction permit from the Turkish authorities for the second string of the Turkish Stream gas pipeline’s offshore section stretching to the Turkish coast.

The second string of Turkish Stream that Ankara approved plans to deliver gas to southern and southastern Europe


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Russian gas monopoly Gazprom has said the company received, through diplomatic channels, a construction permit from Turkish authorities for the second string of the Turkish Stream gas pipeline’s offshore section stretching to Turkey’s coast.

“The TurkStream project is well underway. In accordance with the plan, it is being carried out simultaneously at three sections: onshore in Russia and Turkey and offshore in the Black Sea,” Gazprom CEO Alexey Miller said, adding that over 760 kilometres of the two strings are already built at the offshore section and construction of a landfall in Russia is nearly completed.

“Work has already started at the construction site of the receiving terminal in Turkey. Today, we received a permit to lay the second string in the exclusive economic zone and territorial waters of Turkey,” Miller said on January 19. “We now have all of the required permits from the Turkish Government to lay the TurkStream gas pipeline in the offshore area. It is, therefore, a certainty that both strings of the gas pipeline will be put into operation right on time…before the end of 2019,” he added.

Turkish Stream or TurkStream is a gas pipeline project stretching across the Black Sea from Russia to Turkey and further to Turkey’s border with neighbouring countries. The first string of the gas pipeline is intended for Turkish consumers, while the second string will deliver gas to southern and southeastern Europe.

Alexei Kokin, a senior oil and gas analyst at UralSib Financial Corp in Moscow, told New Europe by phone on January 23 that the Turkish permit “was either expected or should have been expected because the problematic part was not getting permission from Turkey, it will be getting permission from the EU…not so much from the EU, itself, but from Gazprom’s customers. It will be hard getting them to agree to buy from the future hub rather from the current pumping stations along the Ukrainian border….The big problem is getting everyone, or most everyone, to switch from the Ukrainian route to the southern route, while maybe adding some customers in southern Europe”.

While the first string of the Turkish Stream pipeline to Turkey is certain, the second string that will probably deliver gas to the Greek-Turkish border and onto the rest of Europe must comply with EU laws, the European Commission has said.

“I think there is as much uncertainty as when they announced the project. and at that time it was completely unexpected. Let’s say…it was unorthodox because normally you don’t that. You don’t deliver gas to some hub,” Kokin told New Europe. “You have to have a complete infrastructure and you have to have the contracts with customers renegotiated because the whole purpose of this pipeline, I think, is to get the rest of the Ukrainian transit. in as much as possible, rerouted through Turkey. So the heavy weightlifting is still ahead,” the UralSib analyst added.

Kokin opined that building the Nord Stream-2 pipeline from Russia to Germany and bypassing Ukraine is a more mature project. “Nord Stream-2 is easier to do because it runs parallel to the existing Nord Stream-1. There’re still some regulatory hurdles but conceptually you just increase the same gas available to the same customers through the same route that has already been used for three years. It’s more doable. On the border with Greece you have no existing infrastructure,” Kokin said.

Each string of Turkish Stream will have a throughput capacity of 15.75 billion cubic meters of gas per year. Construction of the pipeline’s offshore section commenced on May 7, 2017.

 

 

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