Italian oil services contractor Saipem will no longer carry out its $2.7 billion contract to lay the natural gas pipeline under the Black Sea for the Turkish Stream project.

Turkish Stream pipeline talks frozen

Turkey

ISTANBUL, September 11, 2015 – Talks for the proposed Turkish Stream pipeline have been frozen between Turkey and Russia, Turkey’s energy minister Ali Riz Alaboyun announced at a press conference on Friday. Disagreements over discounted gas prices and an unstable Turkish political situation saw the negotiations decline.

“Russia offered a gas discount of around 10.25 [percent], but we did not accept this, as we saw this as a beginning price to start negotiations,” Alaboyun said at the press conference. “This was not a prerequisite to start talks over a gas pipeline project for us. Besides, Russia does not keep its promises on gas discounts now. All these issues will be clarified during the term of the next minister after me after the elections.”

Gazprom’s deputy chairman denied that the pipeline had been cancelled as recently as Tuesday.

The Turkish Stream pipeline was conceived at the end of 2014 as a replacement for the South Stream project, designed to pipe gas from Russia to Bulgaria via the Black Sea. The South Stream project was scrapped pursuant to tensions with the EU over Ukraine. The aim of both projects has been to create a new transport route for Russia’s gas to Europe. In a visit to Ankara in December 2014, Russian President Vladimir Putin had pledged gas discounts for Turkey as part of its co-operation in the project.

For more news and features on Turkey, click here.

Read our latest insights on: