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Comment: Erdogan and Putin haggle for Turkish Stream

The presidents of Russia and Turkey will clean up on Tuesday in St. Petersburg, their relationships and a pipeline project to revive. However, there is a sticking point, says Andrey Gurkov.

Recep Tayyip Erdogan (li.) and Vladimir Putin have met several times already – here, four years ago, in the Kremlin

The revival of the pipeline project, the Turkish Stream is probably the most simple, clear result of 9. August, in Saint Petersburg meeting between Vladimir Putin and Recep Tayyip be Erdogan. The presidents of Russia and Turkey will commit itself again to the much delayed construction of the first Turkish nuclear power plant Akkuyu.

Otherwise, this short notice, Meet to manifest mainly the end of an ice age in the relations between the two countries. Their authoritarian rulers implemented a quick approach, but then, in November 2015, it came to the noise – because of the conflict in Syria and the shooting down of a Russian plane by the Turkish air force. Now, both of state will seek men to show their people and the whole world, especially the EU, that the dispute is settled. For Moscow and Ankara, it is important to send to Brussels, Berlin, Paris, of course, also in Washington, the Signal: We can be well without you, or even you friends.

A home game for the winner Putin

What is particularly symbolic: The expressions of a detached exchange of opinions and Friendship will not take place on neutral Terrain, for example, on the sidelines of a G20 meeting. The proud Oriental ruler Erdogan, the shooting down of the Aircraft and the death of the Russian pilots recently, has already apologised, coming to Russia, in the birth town of President Putin. This reinforces the impression that this conflict of the Russian President as the winner emerged – both politically and economically. He wanted the Gas Pipeline Turkish Stream and he will get them.

The only question is: in what Form and at what price? And there could be Erdogan as a secret winner. In Petersburg the decision to build only one and not two strands of the gas pipeline, would be in Ankara in the advantage. More specifically: would Moscow and, above all, to Gazprom at a disadvantage.

The failed replacement for the South Stream

In short, to history. The Kremlin has for years been doing everything it can to put a stop to the Transit of Russian gas through Ukraine to an end. This Gas flows through Ukrainian territory to the West, in the EU, but there is also a branch to the South. This line goes through Moldova, Romania and Bulgaria, and also supplies the Western, European part of Turkey, with Russian energy.

Andrey Gurkov is a contributing editor at the Russian editorial team and expert on energy markets

Originally, the whole of Ukraine should be replaced in-Transit through South Stream – a gas pipeline consisting of four strands with a total capacity of 63 billion cubic meters per year. You should be laid from the Russian port of Anapa on the Black sea to Bulgaria and from there to Austria. But it came to a conflict with Brussels, because the project violated EU rules.

And so Putin announced after a Meeting with Erdogan in Ankara in December 2014, suddenly, the redirection of the black sea Pipeline in the direction of Western Turkey, where three of the four strands should be up to the border with Greece drawn, i.e. up to the limit of the main buyer of the Russian gas to the EU. That was the birth of the project “Turkish Stream”. But soon after, the project came to a Halt, all of a sudden, Turkey had no more interest in the Transit of large quantities of Russian gas, and was merely a strand in order to cover the own needs. Then it came to the shooting down of the bomber, and more than half a year, the impression the project was dead prevailed.

Ankara insists on the least cost-effective variant

But no, now it should be revived. The crux of the matter: how many strands it is now? Of fours, there will be no question for a long time. However, only a tube with a capacity of 15.75 billion cubic meters would be for Gazprom, the most expensive and thus most unfavorable variant. Because the Russian state group would have to pay several billions of leveraged Dollars in the Hand, in order to transfer a relatively small Pipeline through the Black sea and on the Turkish shore of the whole infrastructure. And all this only with the aim of replacing a well-functioning overland pipeline.

Of course, a second strand would make the Turkish Stream is not profitable, but at least sales are stronger, because then Gazprom could supply more than the planned Poseidon Pipeline, Greece and Italy. However, the Turkish Deputy Prime Minister Mehmet Simsek said this during his recent visit to Moscow expressly of a strand. That didn’t sound like a great willingness to compromise, Ankara.

Gazprom must be a political aim to subordinate

It is therefore quite possible that the supposed winner is Putin, to take fully fixated on the geopolitical goal of Ukraine for the gas transit, imposed on Gazprom, a burden which can be borne by the state the group is in times of empty coffers, only with the utmost effort: namely to invest in the Black sea a disproportionate amount of money for a single strand of Turkish Stream and to press almost at the same time in the Baltic sea, the laying of the Nord Stream 2 with 55 billion cubic meters of annual capacity.

The supposed loser, Erdogan had opposed at the expense of Russia, a brand-new sub-sea Pipeline built, which is not subject to any transit risks. And in order to even cheaper Gas, because currently, in several countries, incurred the transit costs. Besides, Ankara would be the deepest gratitude to Azerbaijan for sure. Because of these close regional allies moved through Turkey to Greece, the Pipeline TANAP and is not to supply to competing Russian projects of the southern EU States are interested.

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