Cost of Turkish Stream is estimated at ˆ11.4 billion — Gazprom

Russia's state-owned gas major Gazprom estimates the cost of the construction of four pipelines for the Turkish Stream project to be at ˆ11.4 billion. The cost of the first pipeline construction is estimated at ˆ4.3 billion, as a Gazprom representative told TASS in a conference call on Monday.

According to him, the project’s design and configuration involves construction of four pipelines and will feature phased commissioning.

"The total cost is estimated at ˆ11.4 billion, with the cost of the first pipeline being about ˆ4.3 billion," he said.

On August 7, Russia sent two offers to Turkey, related to the intergovernmental agreements on the Turkey Stream. "We’ve sent two offers to Turkey, one for a single pipeline and another for four. Currently, the Turkish side is considering those offers," the Energy Ministry representative said.

Two weeks ago, Russian Energy Minister Alexander Novak said Russia is ready to sign an intergovernmental agreement on 1st line of the Turkish Stream within 1-2 weeks. "Everything will depend on the Turkish Stream, as we’ve submitted our agreement project to the Turkish side. They’re now studying it. We expect to receive their response to our suggestion soon," he said.

Novak added that Russia expects to sign an intergovernmental agreement within the shortest possible time as it’s ready to do it "within a week or two."

Earlier, a source in Russia’s Energy Ministry told TASS that at the level of the heads of states (Russia and Turkey — TASS) a decision on phased implementation of the project has been made. "Russia is ready for a phased implementation of the project,"- the source said.

Thus, the sides are currently negotiating documents regarding a single line of the Turkish Stream, which will supply Russian gas exclusively for the needs of the Republic. An intergovernmental agreement on 2-4 lines of the pipeline, which are expected to transfer gas to the EU countries, will be included in a separate document, the source said.

On August 3, the Turkish Minister of Energy and Natural Resources said Russia had sent a request for four pipelines.

On December 1, 2014 Russian President Vladimir Putin said during his visit to Ankara that Russia abandoned the South Stream project and was embarking on the Turkish Stream instead. The project to build the South Stream gas pipeline was closed due to the European Union’s “unconstructive approach” to cooperation, including Bulgaria’s decision to stop the construction of the pipeline’s stretch on its territory.

Putin said Russia would build a gas pipeline to Turkey where a gas hub at the European border will be created. Gazprom and Turkey’s Botas signed a memorandum of understanding on building the pipeline’s offshore section across the Black Sea. Gazprom Russkaya was set up to be in charge of the pipeline construction.

The larger part of the Turkish Stream pipeline will run across the Black Sea and coincide with the South Stream route approved earlier. The pipeline’s underwater section is 900 km long; the land section is 180 km long. The pipeline will have a capacity of 63 billion cubic meters, of which about 16 billion will be given to Turkey.

Unlike the South Stream, which implied a large-scale infrastructure construction in Europe, the Turkish Stream project is limited to the construction of a pipeline under the Black Sea and a gas hub on the border between Turkey and Greece. The remaining part of infrastructure will have to be built by Gazprom’s European customers themselves. (IPN)