MOSCOW, October 15 – PRIME, Oleg Krivoshapov. Russian President Vladimir Putin proposed to his counterpart Recep Tayyip Erdogan to create a gas hub in Turkey. What is it, what tasks will it solve and what will be required for the implementation of the planned project, Prime understood.
Turkish President Recep Tayyip Erdogan called on October 14 to start working on the idea of creating a gas hub as soon as possible. He said that, like his Russian counterpart Vladimir Putin, he gave the appropriate orders.
Earlier, on October 12, the President of Russia, speaking at the Russian Energy Week, said that the transit of natural gas from the Nord Streams could be moved to the Black Sea region and Turkey. The Russian leader discussed this idea with the Turkish one.
“Together with Mr. Putin, we have instructed our Ministry of Energy and Natural Resources and the relevant institution on the Russian side to conduct a joint study. They will conduct this study. Wherever there is the most suitable place, there, I hope, we will create this distribution center (for gas). “We have a national distribution center, but of course now it will be an international distribution center. Our Ministry of Energy and Natural Resources and the Russian side will work on this issue and present it to us, and then we will take the next step. There is no need to wait here,” Erdogan said on his return on October 14 from Kazakhstan, where he, like Putin, attended the summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA).
According to the Turkish leader, Alexei Miller, head of Gazprom, was present at his talks.
The Turkish leader assured that Istanbul is already taking “all kinds of steps in the field of security.”
Turkey’s interest in this project is natural, says Aleksey Kokin, chief oil and gas analyst at Otkritie Investments. “Firstly, it is in line with the country’s long-term energy strategy – turning into a major energy trading hub,” the expert argues. Kokin recalls that over the past few years, two large transit gas pipelines have passed through Turkey – the Turkish Stream (a branch to Europe) and TANAP (a direction to the EU). Judging by the preliminary volumes, Russia offers volumes twice the capacity of the Turkish Stream transit line, the specialist concludes.
“Secondly, Turkey is given a unique opportunity to contract large volumes of gas on good terms,” Kokin notes. prices have gone up.”
IT WILL TAKE TIME
“Discussions on creating a hub in Turkey for Russian gas are probably still theoretical,” says Sergei Pravosudov, Director General of the National Energy Institute, “because before talking about any additional volumes, we need to build additional infrastructure, which is being done over several years “.
The timeframe for the construction of such a hub can really be three to five years, agrees Ronald Smith, senior analyst at BCS World of Investments. “Russia has established coastal infrastructure, so it’s easier than it could be otherwise. Another issue is that the construction of two underwater pipelines to Turkey is a major project, and coastal infrastructure from Turkey to Greece, Italy, Bulgaria-Austria should also be completed, which is likely to cause significant political obstacles that Turkish Stream 2 will not necessarily face, the expert argues.
As for estimates, in particular, the old South Stream project was designed for 63 billion cubic meters per year, reminds Smith.
“As reported, the entire coastal infrastructure in Russia was built for this,” he notes. “Thus, Gazprom can already supply 63 billion cubic meters of gas to the Black Sea coast, which is 31 billion cubic meters more than is needed for the Turkish Stream.” .
The approximate cost of the project itself can be estimated at 8-10 billion dollars, but this is a very preliminary estimate. Even more will be required from Turkey to organize infrastructure for end-users in Europe, the expert believes.
However, it is difficult to argue with the importance of the very idea of creating such a hub: the supply of sufficient volumes of natural gas from Russia through it could significantly affect trade in this energy carrier in Europe. Thus, the emergence of the Title Transfer Facility (TTF) hub in the Netherlands in 2003 marked the beginning of a new era in the European market, which began to be more influenced by spot sales without agreeing on long-term contracts. Throughout its existence, this sales hub has mainly reflected the speculative moods of market participants, although the original purpose of its creation was the opposite – to provide a guideline for the purchase of “blue fuel” at prices that would meet the interests of buyers.
Now individual buyers in Europe, represented by the EU bureaucracy, are trying to impose their own rules of the game on the gas market, trying to achieve the introduction of marginal energy prices on the regional market. In this regard, the creation of an alternative hub to TTF is a step that can be perceived as aimed at creating more transparent, fair pricing.
Russian-Turkish cooperation in the field of natural gas supplies has found its main practical implementation in the implementation of the Turkish Stream project.
Turkish Stream is one of the export gas pipelines from Russia to Turkey through the Black Sea. The first of the two lines of the gas pipeline is designed to supply gas to Turkish consumers, the second – to supply gas to the countries of Southern and South-Eastern Europe.
The total capacity of the pipeline is 31.5 billion cubic meters (15.75 billion cubic meters for each line).
The starting point for supplying gas to the Turkish Stream is the Russkaya compressor station (CS), which is part of the UGSS of Russia and was built in the Anapa region. It provides the necessary pressure to transport gas along two lines of the gas pipeline over a distance of more than 930 km to the coast of Turkey, where the gas is delivered to the receiving terminal.
In December 2016, a contract was signed between South Stream Transport BV and Allseas Group SA for the construction of the first string of the offshore section of the TurkStream gas pipeline with an option to lay the second string.
In February 2017, South Stream Transport BV entered into a contract with Allseas Group for the construction of the second string of the offshore section of the gas pipeline.
The construction of the TurkStream gas pipeline in the Black Sea began on May 7, 2017. Work started off the Russian coast.
In January 2020, gas supplies through the pipeline began.
This year, Russia has practically lost the ability to supply natural gas to its main market for this energy carrier, to Europe, through the Nord Stream pipeline with a capacity of about 55 billion cubic meters per year (due to sabotage – undermining both pipes of the route) and along the Yamal route. -Europe” with a capacity of 32.9 billion cubic meters per year (as a result of unfriendly actions of the Polish authorities). The supply of gas through the Ukrainian gas transmission system was also reduced (in connection with the demarche of Kyiv) to about 15 billion cubic meters per year.