Turkey and Russia play 'pipeline Realpolitik'

It could be said that the visit of a high profile Russian delegation under the auspices of Prime Minister Putin to Turkey on 5 August was dominated by energy, consequently agreements were reached in all energy fields, gas, oil, power and nuclear. In its entirety the reached agreements and course set might be regarded as a historic step in Russian - Turkish relations.

Less than a month ago Turkey signed the agreement on the construction of the Nabucco gas pipeline, which is to carry Central Asian and Middle Eastern gas to European markets. By committing itself to such a broad energy cooperation with Russia, Turkey has made clear it is neither siding with the Nabucco nor with Russian alternatives, such South Stream or Blue Stream and seemingly wants to profit from what both sides have to offer.

Turkey is trying to benefit from its geo strategic position to the utmost by functioning as bridge from East to West, more preferably as hub, for Central Asian and Russian gas destined for Europe. In case Blue Stream - 2 gets through, which could carry gas further to Israel, Turkey could add a new dimension to its geo-strategic significance by becoming also a North-South hub.

Blue Stream-2

Turkey and Russia also plan to construct the Blue Stream-2 gas pipeline, which would run parallel to the current running from Russia to Turkey over the bottom of the Black Sea. Blue Stream-2 would be intended to serve the markets of Israel, Cyprus, Lebanon and Syria. "But possibly even the Indian market. In case Israel gets connected to Blue Stream -2, gas could be transported through an existing gas pipeline from Haifa to Aylat, from where it could be shipped as LNG to the Indian market.", senior oil and gas consultant, Cyril Widdershoven and Middle East expert, told EEO. According to Widdershoven Gazprom is serious about the project and Israel too would like to see its dependence decrease on Egyptian gas while simultaneously strengthening its geo strategic position. The current Blue Stream has an annual capacity of 16 BCM. Its capacity is likely to be larger.

Russian Energy Minister noted that Turkey and Russia could jointly market the gas from Blue Stream-2, however Turkey is in first instance considered a transit country.

South Stream

Turkey has given its preliminary consent on the passing of the South Stream gas pipeline through its waters. This is of importance to Russia, for it would allow to circumvent Ukrainian waters, South Stream's raison d'etre.

Cooperation in the gas sphere is however not limited to pipeline projects. Both sides also agreed on the construction of large gas storage facilities in Turkey. In addition Gazprom could join in the construction of an liquid to gas terminal in Turkey together with Turkish company Aksa Energy.

Samsun-Ceyhan

Russia and Turkey also signed a protocol on cooperation in the oil sphere. Of particular importance is the establishment of a working group which will study the resource base and the possible route of Samsun-Ceyhan oil pipeline. The working group would consist of Turkish, Russian and Italian representatives. Russian Energy Minister was optimistic and quoted by press as saying that ENI CEO Scaroni had told him that he believes that U.S. companies working in the Caspian region would be the first interested to transport their crude through the Samsun-Ceyhan pipeline.

The Russian in the pipeline would be known after the feasibility study has been completed. Russia has not publicly stated that it sees Samsun-Ceyhan as a competitor to its own alternative, the Burgas-Alexandroupolis oil pipeline, which in contrast to Samsun-Ceyhan is a Russian dominated project with Russian companies controlling a 51% share.

The Samsun-Ceyhan oil pipeline would help ease the pressure on the Bosphorus and Dardanelles passages. The project is estimated at around $ 4 bln. The Kazakh Kashagan and Karachagnak oil fields could serve as it largest resource base, thus explaining ENI's interest in the project.

Nuclear

Russia and Turkey also signed a protocol on cooperation in the field of nuclear technology for peaceful purposes. Turkey plans to take a decision on the tender for construction of nuclear power plant in September. A Russian-Turkish consortium of Atomstroyeksport, Inter RAO UES and Turkish Park Teknik take part in the tender.

Conclusion

Although not entirely unexpected, Russia's courting of Turkey, is a considerable step towards increasing its influence over Turkey as Europe's access gate to Central Asian and Middle Eastern energy resources. To convince Turkey to back its South Stream projects Russia paid a substantial price, possibly offering with 'discount' one or more nuclear power plants and the Samsun-Ceyhan oil pipeline. Although not admitted by Russia, the latter could be considered a competitor of the Russian controlled Burgas-Alexandroupolis oil pipeline. Turkey is cunningly profiting from use the best 'pipeline Realpolitik' has to offer.