Turkey, Gazprom agree on financing Turkish Stream

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    Turkish Stream, the realization of which was delayed due to political crisis between Moscow and Ankara and gas prices, moves ahead.

    Turkey has reached an agreement with Russia’s Gazprom on financing the Turkish Stream on its territory, the general director of the Turkish state-owned pipeline company BOTAS, Burhan Ozcan, said on the sidelines of the 22nd World Petroleum Congress on July 10, RIA Novosti reported.

    “We have already agreed with them on this issue, but I can not disclose the figures – in what percentage ratio we will do it,” he said.

    The process of obtaining permits for the second string of the Turkish Stream continues in a positive way, without any pitfalls, according to the general director.

    In 2014, Russia announced the termination of work on the South Stream project, which was to pass through Bulgaria, Serbia, Hungary, in favor of a new gas pipeline towards Turkey.

    Turkish Stream gas pipeline was announced in December 2014 during the state visit of Russian President Vladimir Putin to Ankara. Then, Gazprom and Turkish company BOTAS signed a Memorandum of Understanding on the construction of an offshore gas pipeline from Russia to Turkey across the Black Sea.

    The realization of Turkish Stream has been frozen for some time due to the strained political relations between Moscow and Ankara, which followed the downing of Russian warplane in Syria.

    This incident sparked a crisis between Russia and Turkey, which lasted until the summer of 2016 when Moscow and Ankara decided to restore economic ties and bring Turkish Stream back on the agenda.

    The Turkish Stream envisages the construction of a gas pipeline along the seabed of the Black Sea to Turkey’s European part and further on to the border with Greece.

    The first stretch will be intended for the Turkish market and the second will supply natural gas to countries of South and Southeast Europe. Each stretch will have a capacity of 15.75 billion cubic meters of natural gas annually. The pipeline is expected to annually pump 31.5 billion cubic meters of natural gas. Its total cost was estimated at $12.9 billion.

    Gazprom launched the construction of the Turkish Stream gas pipeline’s offshore section near the Russian coast of the Black Sea on May 7.

    Recently, Russian energy giant Gazprom and Hungary signed another agreement on gas supplies to the country via Turkish Stream. The continuation of the Turkish Stream to Hungary will be built before the end of 2019.

    The project is beneficial for both sides. Turkish Stream will allow Gazprom to expand its presence not only in the Turkish but also in the South European market, where its share faces competition from incoming Caspian gas. At the same time, Turkey will have the chance to upgrade its position from being an energy bridge to an energy market.

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