Ivan Kapitonov: "Turkish Stream is needed by everyone"

Today Ankara is hosting talks on the resumption of the actual implementation of the Russian-Turkish pipeline project Turkish Stream, the Russian side is represented by the head of Gazprom, Alexei Miller, and his deputy Alexander Medvedev. In anticipation of a full unfreezing of the project, the associate professor of VSHKU RANHiGS and senior fellow at IE RAS, Ivan Kapitonov,  spoke with Vestnik Kavkaza about the prospects for the construction of the Turkish Stream.

- In your estimation, how much is Moscow interested in the implementation of the Turkish Stream today and what will ensure its interest?

- Now there is a situation when the market price value of the Turkish Stream begins to exceed the value of Nord Stream-2, and due to the fact that the current gas prices have fallen to historic lows more than two months ago, the Turkish project is not profitable. However, there are ways to ensure its profitability, in the first place, there is a  possible proposal of the Turkish side to share the costs of its construction. If most, or at least a significant part of these costs will be taken on by Ankara, the project will become profitable for Russia. Certainly, this is one of the subjects of discussion during the negotiations, but if the Turkish side accommodates Russia, the opportunity will appear to discuss the Turkish Stream from the economic point of view.

As for politics, it is now extremely important for us to promote the idea of ​​the Turkish Stream, so Europe can feel competition. By this or that pipeline we will reach them with our gas, and if they do not want to manage this gas, I mean, if Germany does not want to take responsibility for the management of Nord Stream-2, we will find ourselves in quite an interesting position – on the south of Europe, so that the countries of the ‘strong core’ will have less relation to this gas and will be forced to compromise with Turkey, and they do not want to do so. If Turkey receives the gas key to Europe, it would be a serious blow to the EU's soft underbelly. In this connection, by promoting the idea of ​​the Turkish Stream, simultaneously we will advance with Nord Stream-2, we will be given more guarantees, and Europe will be able to find a compromise on the northern route, which is still cheaper and more profitable.

- What is Turkey’s interest in this project?

- At the first assessment, it is the possibility of obtaining the gas key to the heart of Europe. Secondly, the Turkish Stream for Ankara is an additional guarantee of the energy security of the republic, where there are almost no gas sources. Pipeline gas is by definition cheaper than LPG (saving on transportation and costs), and Turkey gets the direct benefit from a new pipeline. Ankara made a stake on this project before, and only our political differences put a temporary end to the Turkish Stream.

- In your opinion, how fast can the parties agree on the project and what are the pitfalls of the project? 

- There are almost no pitfalls. Of course, Turkey can change its position on various aspects – on the direct costs of separation, on discounted rates for gas. The most probable is the second aspect, because gas prices have previously been a major stumbling block in our negotiations, and with the cost-sharing, I think, there will be no problems, according to the latest statements by President Recep Tayyip Erdogan. It is likely that Gazprom will be playing for time so that the European Union has the opportunity to compromise with us. In general, in my opinion, the current stage of the negotiations will last for six months, no more.

- To what extent is the European continuation of the Turkish Stream currently problematic?

- In my opinion, this problem is not Russia’s, but Europe's. The fact is that the Russian gas that will go to the Turkish Stream will be controlled by Ankara. Will Europe be willing to buy gas from Turkey? It will probably decide to diversify its supply, so it will have to finish building its section of the pipeline, which is quite realistic – there are no problems with it.