Igor Yushkov: "Everything is ready for the construction of Turkish Stream"

Another step towards the official start of the Turkish Stream project was made today by the Russian Federation Council, which approved the law on ratification of agreement between the governments of Russia and Turkey, previously adopted by the State Duma. Before the completion of all legal conditions, necessary for the construction of Turkish Stream, a leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, told about prospects of this project in an interview with Vestnik Kavkaza.

- How soon will sides begin practical implementation of the Turkish Stream?

- First of all, it should be noted that the implementation of the Turkish Stream project began long ago, right now they just have to finish all pipe-laying works. Gazprom has already thought out all parts of the project: the Black Sea has already been studied, the old route of the South Stream is already prepared, just like the area where pipeline goes from Bulgaria to the south of Turkey. Now they just have to determine the exact route of the first and second lines on the territory of Turkey and allocate territory for them. Right now there are no problems, we don't have to worry about signing all the necessary documents, so everyone understands that the works should begin. 

- Are there still any conflicts between the Russian and Turkish sides?

- Everything with the first line is pretty clear, it will definitely be built, there are some disagreements between Gazprom and private Turkish gas companies that demand a discount. The thing is that when the first agreement on Turkish Stream was prepared in 2015, Gazprom promised to give Turkish companies a discount on gas for consumers. It was only natural at the time, since gas prices were quite high, more than $300 per thousand cubic meters - but now European prices are $200 per thousand cubic meters or even less. Since market conditions have changed so much, Gazprom says it can't give this discount because gas is already cheap, and Turkish companies insist that discount should still be provided. There are still disputes about it. It should be understood that both sides don't want this price conflict, since Turkey is interested in reliable gas supplies and in prospects of turning into transit country for Europe. 

- Will Turkey abandon supplies through Ukraine after the implementation of Turkish Stream?

- Every year Turkey gets about 15 billion cubic meters of Russian gas through Ukraine, Romania and Bulgaria. As soon as the first line of Turkish Stream will be finished, Turkey will receive all gas purchased from Russia directly, without intermediaries, which will improve its energy security. I think that's the reason for the construction of the first line. In addition, if both lines will be built Ukraine will lose approximately 30-32,5 billion cubic meters of transit Russian gas.

- What are the chances that the second line will be constructed?

- Turkey is interested in it, since this pipeline will also allow it to improve its status before Europeans and will provide additional leverage in the negotiations with Europe. On the other hand, Turkish part of the second line of Turkish Stream is under a big question. Despite the fact that the construction of the second pipeline through Turkey to Bulgarian border was already prescribed in the intergovernmental agreement, I'm not sure Gazprom will use this route - ideally, the company wants to build the second line using the old route of South Stream, directly to Bulgaria and then to Austria's Baumgarten through the Balkans. It will allow to supply gas without intermediaries.

We should not forget that the Europeans themselves have not decided yet in what format are they willing to accept the Turkish Stream project. And if the first line is already finished, the second one is still up to discussion.