Russia Says No Extra Risk in Turkey Unrest to Gas Pipe Talks

  • Russia suspended talks in December amid tensions over Syria
  • Negotiations have restarted after failed coup in Turkey

Russia and Turkey have resumed talks on a possible natural gas link through the Black Sea even as analysts see risks for the slated route to southern Europe amid political turmoil in Turkey.

“Any region has its own risks, as well as commercial benefits,” Russian Vice Prime Minister Arkady Dvorkovich told reporters after discussing the pipeline project, shelved more than seven months ago, with his Turkish counterpart Mehmet Simsek in Moscow Tuesday. “We knew all the risks when we made a decision to start designing Turkish Stream.”

Further civil unrest in Turkey poses significant risks to hydrocarbon transit through Turkish territory, BMI Research analysts said in a July 22 note. The failed coup attempt in Turkey on July 15 left about 250 people dead, with the government retaliating with a sweeping purge of tens of thousands from the military, police, civil service, business and academia.

While there is no agreement on resuming gas-pipeline works yet, Turkey sees “progress” in the talks, Economy Minister Nihat Zeybekci told reports in Moscow after meeting Russian Energy Minister Alexander Novak.

‘Double Standard’

It’s “a bit of a double standard” given Russia’s claims on Ukrainian gas transit risks, said Sijbren de Jong, an energy security analyst at the Hague Centre for Strategic Studies. While “there is significant political upheaval in Turkey” it’s always been a reliable transit country, he said. 

Russia’s Gazprom PJSC has been planning to cut reliance on gas transit through Ukraine, about 40 percent of its current exports to Europe, citing unrest in the country.

Russia has resumed talks with Turkey after halting several projects last year over the downing of its military jet, an incident that plunged relations between the two countries into crisis. The tensions eased after Turkish leader Recep Tayyip Erdogan apologized in June. He will meet Russian President Vladimir Putin for the first time since the incident on Aug. 9 in Russia’s St. Petersburg, the Kremlin said Tuesday.

Officials agreed on Tuesday to set up a working group that would prepare a possible intergovernmental agreement “to revive the project,” Gazprom deputy head Alexander Medvedev said after the meeting. A deal and its timing is possible only after the presidents meet next month, he said.

Turkish Stream, originally designed to make the nation a linchpin in Europe’s energy supplies, replacing Ukraine from 2020, has also been delayed amid gas-supply pricing disputes. The link’s annual capacity, initially planned at 63 billion cubic meters (2.2 trillion cubic feet), or about a third of Gazprom’s exports to Europe, was later cut by 50 percent.

Gazprom has said it’s assessing all possible southern routes to the EU, including Turkey and Bulgaria. It may build only one link for the Turkish local market as there are other obstacles to a transit pipeline, including EU regulation and “poor” cases for public and private financing in southeastern Europe, De Jong said.

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