Gas to Flow Through Turkish Stream By End of 2016

May 7, (Novinite) – Gazprom announced on Thursday that gas deliveries through the Turkish Stream pipeline will start in December of next year.

“We had very efficient and crucial talks today. It was agreed to bring onstream Turkish Stream and to start gas supplies in December 2016,” Gazprom CEO Alexey Miller said in a company statement.

Miller spoke after meeting with Turkey’s Energy and Natural Resources Minister Taner Yıldız in Ankara earlier on Thursday.

“Gazprom, while implementing its portion of work under the Turkish Stream project, will follow the agreements reached today,” Miller added.

Miller said in December of last year that Gazprom will build a pipeline under the Black Sea to Turkey and further west to a gas hub on the country’s border with Greek border for further distribution to European customers. The pipeline called Turkish Stream is to replace the South Stream gas pipeline project bypassing Ukraine which Gazprom said it had abandoned in light of European Commission objections. South Stream, starting in Russia, was to cross the Black Sea and come ashore in EU member Bulgaria.

Thursday’s announcement is a breakthrough for Gazprom because Turkey had earlier expressed concern over being too dependent on Russian energy supplies, Reuters commented in its coverage of the news. According to Russian media reports in March the negotiations between Russia and Turkey on the price of the piped gas were deadlocked, possibly delaying the project.

Gazprom plans to pump up to 63 billion cubic metres of gas per year through Turkish Stream, the same as the scrapped South Stream. This will include 47 billion cubic metres to be transited to Europe via the future distribution centre at the Turkish-Greek border.

The announcement by Alexey Miller came two days after Russian business daily Kommersant reported that Gazprom has agreed to offer discounts on Russian gas supplies to private Turkish companies that account for more than a third of Turkey’s imports of Russian gas.

According to sources of Kommersant, the discount for the first quarter of 2015 will be about 25%. A further 15% discount will be added in the second quarter and in May the price will fall to some USD 260 per 1,000 cubic metres, allowing Gazprom to retain its market share in Turkey, Komersant said.

The agreement on the price discount will be retroactive as of 1 January, 2015, allowing Turkish gas importers to get back USD 250-300 million from Gazprom, according to Kommersant estimates.

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