Turkish Stream deal may be signed during Putin’s Istanbul visit: Russian minister

Turkish Stream deal may be signed during Putin’s Istanbul visit: Russian minister

Nerdun Hacıoğlu - MOSCOW
Turkish Stream deal may be signed during Putin’s Istanbul visit: Russian minister Turkey and Russia may sign a final agreement for the Turkish Stream project during Russian President Vladimir Putin’s visit to Istanbul on Oct. 10, Russian Energy Minister Alexander Novak has signaled.

Putin will be in Istanbul to attend the 23rd World Energy Congress upon the invitation of President Recep Tayyip Erdoğan. The two leaders will hold a bilateral meeting on the sidelines of the congress with the participation of related ministers.

Questioned whether there is a possibility of signing the main Turkish Stream deal during Putin’s visit, Novak said:  “The project is at a high degree of readiness inter-governmentally. Of course, we are making every effort in the remaining time to carry out all the necessary procedures, both in Russia and Turkey, to sign the agreement in the near future. I think there is such a possibility,” he added. 

Russia’s Gazprom and Turkey’s BOTAŞ in 2014 signed a memorandum of understanding (MoU) for the construction of the Turkish Stream gas pipeline, with a capacity of 63 billion cubic meters (bcm) of gas per year from Russia to Turkey across the Black Sea. 

Novak noted that the Turkish Stream and the Akkuyu nuclear power plant, which will be Turkey’s first, are key to further reviving the countries’ bilateral ties in a normalization process after the jet crisis. 

“Turkey is our neighbor and a partner that is important to us. Our trade volume surged to $35 billion in 2014, but it decreased almost 40 percent in the first eight months of 2016 compared to the same period of 2015 due to the diplomatic crisis … In the normalization process, energy is one of the key areas. Both the Turkish Stream and the Akkuyu power plant are crucial projects that will revive our ties,” he said. 

“If we want to boost our trade and economic ties, both of these projects need to be completed and become operational,” he added. 

Novak said that the first phase of the Turkish Stream, which is based on the build-operate-transfer (BOT) model, is comprised of the paving of two pipes. 

Some 15.75 bcm of Turkey’s annual gas needs will be met through the first of these pipes, while the same amount of gas will be carried to Europe via the second pipe, Novak said. He added that both the Russian and Turkish energy ministries had established working groups to give a final form to the intergovernmental agreement for the Turkish Stream. 

“Turkey has even made some changes in its laws to enable the construction to start immediately. As soon as the project is completed it will add value to the Turkish economy,” said Novak, adding that for this reason Turkey is doing its best to accelerate the Akkuyu power plant project. 

He also said negotiations over gas prices have resumed.

“I believe both sides will find a common path. There is, however, a reality here: Turkey’s BOTAŞ has taken the issue to the arbitration court and the first trial is due in 2017. I think that Russia’s Gazprom Export and BOTAŞ can resolve the issue before this date,” Novak said. 

Gazprom Export sells gas to a number of private players in Turkey, which makes setting gas prices particularly complicated, he added.

“All parts of the issue must be taken into consideration in an integrated approach while seeking a resolution,” Novak said.