Market timing - key factor for Turkish Stream
Wednesday, September 7“While available financing would improve the prospects for the Turkish Stream pipeline project, it is also important to consider market timing,” says Agnia Grigas, an energy and political risks expert and non-resident senior fellow at the Atlantic Council.
“With a current gas glut and low prices in the global gas markets, expensive gas infrastructure projects become less appealing,” Grigas told Trend.
She believes that while it would be in Russia’s interests to build Turkish Stream, with limited resources and considering current markets, Moscow would probably prioritize other gas infrastructure projects such as Nord Stream II pipeline to Germany, Power of Siberia pipeline to China, and boosting its LNG export infrastructure.
The Turkish Stream project, which involves the construction of a gas pipeline from Russia to Turkey through the Black Sea, was frozen after the relations between Moscow and Ankara deteriorated in November 2015.
During a meeting on Aug. 9, Vladimir Putin and Recep Tayyip Erdogan agreed to resume the implementation of the Turkish Stream project.
Earlier Turkish media referring the country’s president Recep Tayyip Erdogan reported that Turkey is ready to equally split the financing of the Turkish Stream pipeline with Russia.
Last week Russian Energy Minister Alexander Novak told journalists that Russia and Turkey could sign an intergovernmental agreement on the Turkish Stream gas project within one or two months.
Regarding the recent proposal of Turkish Foreign Minister Mevlut Cavusoglu to connect the Turkish Stream pipeline to the Trans Anatolian pipeline (TANAP), Grigas believes that Brussels will be less enthusiastic about such a possibility.
She noted that TANAP is part of the Southern Gas Corridor intended to bring Azerbaijani and potentially Central Asian gas to Europe to help it diversify away from Russian gas.
“Connecting TANAP to Turkish Stream would potentially defeat this purpose. Indeed, Russia has tried to hold on to the South Eastern European market and to outmaneuver previous plans to diversify this region such as the previously planned Nabuco pipeline project and Southern Gas Corridor with its own pipeline plans south as South Stream and now Turkish Stream,” Grigas said.
TANAP project envisages transportation of gas from Azerbaijan’s Shah Deniz field to the western borders of Turkey. The gas will be delivered to Turkey in 2018, and after completion of the Trans Adriatic Pipeline’s construction, the gas will be delivered to Europe in early 2020.
Meanwhile, Russian energy ministry recently said that no discussions has been held yet on connection of the Turkish Stream to TANAP.
“Russia’s Energy Ministry has not received an official proposal on the possibility of connecting the Turkish Stream to the TANAP to supply Russian gas through Turkey to Europe,” the Russian Energy Ministry told Trend earlier. (Trend.az)