With the TurkStream pipeline inaugurated, a southern export route to Europe has been opened for gas to travel from Russia. A high-profile ceremony on the occasion took place in Istanbul on Jan. 8, 2020, and was attended by the leaders of Turkey, Russia, Bulgaria and Serbia – the immediate project runners and beneficiaries. The TurkStream official commissioning was a historic event for Turkey, Russia and the countries of southern and southeastern Europe, and eventually, it will be a historic event for the whole European continent.
Besides supplying the Turkish consumer with additional volumes of natural gas, the pipeline has laid down the route for Russian gas deliveries through Turkey to the European markets. Incidentally or not, to the energy markets of the countries where the Trans-Anatolian Natural Gas Pipeline (TANAP) and Trans Adriatic Pipeline (TAP) are due, to bring the natural gas from Azerbaijan and the planned East Med Pipeline is to head. The TurkStream and TANAP-TAP pipelines pass through Turkey, an emerging regional energy hub, while the projected EastMed aims to pass from Israel through Greek Cyprus and Greece, ultimately sidelining Turkey.
Commenting on this, President Recep Tayyip Erdoğan has said that "there is no chance of realizing any project in the Eastern Mediterranean that excludes our country."
Regarding Turkey's efforts in the region, he added that "the only aim of our hydrocarbon exploration activities in the Eastern Mediterranean is to protect the interests of our country and the Turkish Republic of Northern Cyprus (TRNC)."
Russian gas travels south
The TurkStream pipeline's launch is anticipated to increase the stability of Russian gas exports to Europe, strengthen EU energy security and further establish Turkey's position as a regional energy hub. The pipeline's successful commissioning is certainly a "remarkable outcome of the Turkish-Russian strategic partnership," as Russian President Vladimir Putin mentioned in the Jan. 8 inauguration ceremony.
The successful commissioning is timely considering the U.S. sanctions imposed last December directly against the corporations engaged with the construction of the TurkStream and Nord Stream-2 gas pipelines. The sanctions failed to affect TurkStream since the construction of its two submerged lines had been completed in November 2018 and were both filled with gas by the end of November 2019.
Nevertheless, they delivered a blow to the scheduled commissioning of the Nord Stream-2 pipeline and, as President Putin announced after his meeting with German Chancellor Angela Merkel on Jan. 11, the pipeline will become operational at least a year later than originally envisaged. Certain analysts believe that its delivery capacity may need to be reduced as well in order to meet the EU legislation provisions.
This alone makes the TurkStream pipeline a viable element of Russian gas stability for its deliveries to its consumers, and particularly to the southeastern European countries, namely, Bulgaria, Greece, North Macedonia, Serbia, Hungary, eventually Austria, and potentially Italy as well.
Beginning Jan. 1, 2020, due to TurkStream, Russian gas began to go to Bulgaria and further to Greece and North Macedonia. With the construction of the Balkan Stream through Bulgaria set to be completed later this year and the planned expansion of the local distribution network, TurkStream will reach the Serbian consumers who today continue receiving Russian gas from the Trans-Balkan main pipeline, an old connector passing through Ukraine.
Russia's Gazprom is TurkStream's immediate owner and in return, it is saving costs by pumping the gas directly to Turkey instead of transiting through Ukraine, which has positively affected the gas prices in Turkey and Bulgaria since the beginning of the year. According to Gazprom, TurkStream's subtotal cost amounts to $7 billion, compared to the originally envisaged 11.4 billion euros when four lines of supply were planned to be laid. The company expects to fully reimburse the construction expenses in five years.
Turkey, the regional energy hub
TurkStream's launch strengthens Turkey's position as the regional energy hub by adding another important element to its currently available gas infrastructure. The connector operates two supply lines of close to 16 billion cubic meters (bcm) capacity each and coming ashore in the vicinity of Kıyıköy on the Black Sea. TurkStream's submerged section runs more than 900 kilometers to cross the bottom of the Black Sea from Russia to Turkey at a record depth of 2,000 meters.
While TurkStream's first line was laid down to supply the Turkish consumer, the second one, operated by the Gazprom-BOTAŞ joint venture, runs by land to the Turkish-European border in the Thrace region to connect with the Balkan Stream. The Bulgarian gas distribution network currently is in the process of expansion.
When commissioned later this year, the Balkan Stream will pump to Serbia the gas coming from Turkey through TurkStream, which may reduce the Russian gas transit through Ukraine by close to 32 bcm annually once TurkStream reaches full operational capacity by the end of the year.
The Balkan Stream commissioning is no less pivotal for the Azeri gas deliveries to southeastern Europe through Turkey via the TANAP-TAP pipeline, as Bulgarian Prime Minister Borisov mentioned during the TurkStream inauguration ceremony. With both the Russian and Azeri pipeline gas passing through Bulgaria on to Europe, the country both anticipates a price reduction and a handsome surplus to the budget from the transit fee.
A vital link of the Southern Gas Corridor (SGC) sponsored by the EU, the TANAP-TAP pipeline is due to provide a route of supply for the natural gas from the Caspian to the countries of southern and southeastern Europe to reduce their gas dependence on the Russian sources. With the TAP construction completed, consumers will start to annually receive some 10 bcm of Azeri gas reaching them from Turkey by means of TANAP.
As such, both the TurkStream and the TANAP-TAP are expected to add an important operational component to the Turkish energy distribution network. With the floating PLG storage units and the land storage facilities connected to the local pipelines network, Turkey is now receiving stable access to the main regional connectors of TurkStream and TANAP-TAP. This contributes to Turkey becoming the most developed energy market in its region, ranking fourth in Europe. To further its bid to become the regional trading hub, Turkeyalso launched a gas trading market in September 2018 under the Energy Stock Exchange (EPİAŞ).
Route for Mediterranean gas
On Jan. 2, Greece, Israel and the Greek Cypriot administration signed an agreement on the construction of the EastMed pipeline to bring to southern Europe the natural gas from the Leviathan mega offshore reserve on the Mediterranean. The 1,900-kilometer connector is planned to pump 12 bcm of gas annually from Israel through Greek Cyprus, Crete and Greece to Italy and the countries of southeastern Europe, the final recipients of the gas to be delivered by the TurkStream and TANAP-TAP pipelines.
Planned for commissioning by 2025-2026, the EastMed pipeline is due to become the longest submerged connector in the world and will enjoy EU support as it is granted the status of its Project of Common Interest (PCI). Having funded the EastMed's feasibility study, which cost 2 million euros, the EU is currently in the process of deciding whether or not to cover half of the construction cost of the project, which is estimated at 7 billion euros. The Greek DEPA and Italian IGI Poseidon corporations have already pledged to fund at least 50% of the pipeline construction costs.
As of today, the project doesn't envisage the involvement of Turkey, and its planned route clearly bypasses Turkish waters. Nevertheless, Turkey has the longest shoreline in the Eastern Mediterranean and "will, of course, have a say in any project related to this region," President Erdoğan said.
Turkey has assumed the status of a guarantor nation for the TRNC and contested more than once the Greek Cypriot administration's unilateral drilling activities on the Eastern Mediterranean shelf in support of the TRNC rights to the resources in the area.
Turkey's active position in regional matters was further grounded Nov. 27, 2019, when it signed a memorandum on an exclusive economic zone (EEZ) with the Libyan Government of National Accord (GNA).
The Turkey-Libya agreement has established a bilateral maritime delimitation regime between the countries to secure the Turkish rights in the Mediterranean and protect them from acts of infringement of the third parties. Meanwhile, Turkey's signing of a memorandum with the internationally recognized government of Libya has generated the vehement criticism of Greece and Egypt, who filed a petition with the U.N.
The gas race never stops
These developments are prone to increase tensions in the Eastern Mediterranean. Gas deposits exploration sharpens the competition for control of their development and transportation. Considering the region is a zone of interest for the energy market, the market's traditional players are reluctant to accept Turkey – the very country that is energy dependent and whose involvement in energy matters has been limited to pipeline gas imports until recently – as a new regional energy hub.
* Freelance journalist living in Istanbul