Turkish Stream pipeline talks stall

Turkey

ANKARA, July 30, 2015 – Negotiations between Russia and Turkey on the Turkish Stream pipeline project have been suspended, following disagreement over pricing and permit allocations.

Turkish authorities are frustrated by Russia’s failure to close on a promised 10.25-percent discount on gas bought from government-controlled Gazprom. Turkey’s energy minister had originally announced the rate cut in February for the 28 bcm-30 bcm (989 bcf-1.06 tcf) the country imports annually.

Russia has also insisted Turkish authorities clear permits for all four proposed sections of the pipeline, instead of only the first, a demand that Ankara perceives as unreasonable. “Russia wants Turkey to say yes on a number of issues that are way too complicated to be included as part of TurkStream negotiations. That will not be possible,” Reuters quoted a Turkish energy official as saying.

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, but scrapped pursuant to tensions with the EU over Ukraine. The aim of both projects is 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.

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