Gazprom CEO Alexei Miller said on October 6 the Russian gas monopoly
has almost halved the planned capacity of its controversial Turkish
Stream gas pipeline project to 32 billion cubic metres per year from an
original capacity of 63 billion cubic metres.
After Russia scrapped the South Stream pipeline, Gazprom has pushed
ahead with Turkish Stream that is also planning to bring gas to Europe
bypassing Ukraine.
Addressing an industry conference on October 6, Miller said Gazprom
now planned to supply up to 32 billion cubic metres (bcm) via Turkish
Stream because it also plans to build the Nord Stream-2 gas pipeline,
which runs on the bed of the Baltic Sea to Germany.
“Speaking about designed capacity … we can talk that it will be
created at volumes of up to 32 bcm,” Miller said, adding that the
reduction in capacity was linked to Gazprom’s plans related to
Nord-Stream-2.
Russia signed recently an agreement with five European companies to
increase the capacity of the Nord Stream pipeline from Russia to Germany
under the Baltic Sea to 110 billion cubic metres per year from as early
as 2019.
Alexander Kornilov, a senior oil and gas analyst at Moscow’s Alfa
Bank, told New Europe by phone on October 6 that halving the planned
capacity of Turkish Stream to 32 billion cubic metres “has been widely
anticipated” after Gazprom signed some agreements with its European
partners regarding Nord Stream-2 and some cooling down in the talks
between Moscow and Ankara after the change of the political landscape in
Turkey.
“Given the slowdown in the realisation by Gazprom of Turkish Stream
after in fact they slowed down significantly the process during the
summer period, I think all these things demonstrated already that
probably the initial capacity of 63 bcm looks pretty unachievable in the
future,” Kornilov said.
“It’s not really a big surprise for the market and for now I think
definitely the project looks more affordable than 63 bcm so that’s
definitely much easier to conduct compared to the full capacity one in
terms of both capability of Gazprom and also the ability of Gazprom to
raise project financing from the guys in Europe and Turkey,” the Alfa
Bank analyst noted.
Gazprom had originally planned to supply Europe with a total 63
billion cubic metres by 2020 via Turkish Stream, with the first line of
15.75 billion cubic metres designed for Turkey and the rest to be
delivered on the Greek-Turkish border and then onwards to Europe. “The
key distinction from South Stream is that Gazprom has agreed to run Nord
Stream-2,” Kornilov said.
Gazprom has earlier said it would have to postpone the launch of
Turkish Stream as Moscow and Ankara did not sign an intergovernmental
deal, essential for construction to start. Turkey holds new
parliamentary elections November 1. “It’s not an agreed project already.
It’s still up in the air. Russia still needs to talk to Turkey but
that’s hardly possible before the dust settles in terms of the political
landscape in Turkey and before the new government, the new cabinet
takes shape. That means Russia doesn’t have much chance to continue
these talks before the beginning of next year,” Kornilov said.
Russia and Turkey are also at odds over Russian President Vladimir
Putin’s decision to start air strikes in Syria, which Turkish President
Recep Tayyip Erdogan on October 4 said was a “grave mistake”.
Turkey will probably continue purchasing 15 billion cubic metres of
natural gas and the remainder will be transferred to the Balkans,
Kornilov said. “That’s still feasible. It depends on the negotiations
with the local countries and the local companies operating in those
countries that we have already seen. Greece definitely supports this
idea especially given that Russia wants to support Greece with financing
and some other things going forward. But as far as that Balkans are
concerned here we have seen not straight forward reaction of local
authorities,” Kornilov said, adding that while some countries have shown
interest, other countries like FYROM, for example, “has not said
‘yes’”. “The situation still remains to be seen how it develops,” he
said. The Russian expert also stressed that the response of the European
Commission will also play a key role for extending the Turkish pipeline
to Europe.
http://neurope.eu/article/gazprom-halves-turkish-stream-capacity/