28 Jun

Russian energy leader Gazprom maintains its leading position in the gas industry of the world. The world’s access to gas is enabled mainly via Gazprom’s transportation lines as Gazprom owns the largest gas transport system (approximately 158,200 kilometers). Although Gazprom was partly privatized a while after 1989, Russian government currently holds the majority stake of the company. The government involvement in energy industry necessitates political agreement between parties as well as industrial partnership agreements.Beginning from 1984, with the construction of Urengoy–Pomary–Uzhgorod pipeline, Europe has been using Russian gas. The fact that Europe is dependent on Russian gas makes the issues between Russian government and Europe a lot more than energy. Russian government makes itself listened to in the international arena owing to large amount of gas supply it holds. With new projects, Russian government and Gazprom have no intention to give up being a leading actor in energy sector.

Being known as the world’s biggest gas extractor and supplier, Gazprom draws attention with its new and controversial projects. One of those highly controversial projects was the South Stream project which was planned to transmit gas from Russia to Eastern Europe through Black Sea. However Russia had to cancel the project due to objections from European Union and showed up with a new project named Turkish Stream.

During his visit to Turkey in December, 2014, Russian leader Putin proposed a pipeline project that delivers gas from Russia to Europe via Turkey. The project was originally named as South Stream and thought to pass the Black Sea, Bulgaria and Serbia to reach Europe on the one branch and serve to Italy via Greece on the other branch.Europe is dependent on Russia for 30 per cent of its gas supplies. 50 per cent of the gas flowing from Russia to Europe goes through Ukraine. The South Stream project was first designed to create a direct line between Russia and Europe in order to avoid from paying fees to Ukraine. Therefore, both parties, Europe and Russia were to be profited in the end. However, Russian government had to abandon the South Stream project due to objections from European Union countries. European Union claimed that the project was not in compliance with the Union’s energy legislation especially by putting forward the Third Energy Package.Third Energy Package asserts that transportation and production of gas should not be allowed to be done by a single company.

In order to pass by EU obstacles, Russia came up with Turkish Stream project. Having agreed with Turkish government in December, 2014, Russian President Vladimir Putin and Greek Prime Minister Alexis Tsipras have recently got together to discuss Turkish Stream project in detail. In their press conferences after the meeting, both leaders expressed their satisfaction and hopes about the project.

In its original form, the South Stream project was planned to reach Europe via Bulgaria. However, with the new project, the pipeline will join the land in Turkey. The fact that Turkey will be an important part of the new project is expected to bring capital to the country. Experts define the project as a win-win situation. Russia, Turkey and European countries, especially Balkan countries, will benefit from the project in several ways. Turkish Stream is expected to be completed by 2019 however the date is not certain yet. With the completion of the project, gas prices are supposed to be reduced both for Turkey and for European Union countries.

Yet, in order to be the main hub, Turkey has to give permission to all four pipelines that are planned to pass through Black Sea to Turkey’s European land and then, to Greece. According to Turkish authorities, Turkey has allowed the construction of only one pipeline so far. The allowed pipeline will transfer 15,75 billion cubic meters of gas and is expected to meet the internal gas need of Turkey. The total capacity of the Turkish Stream project is 63 billion cubic meters.

The balances in energy sector are about to change with this new project. After its completion in 2019, Ukraine will be bypassed in the transferring process. Additionally, Turkey will be supplying its internal energy via a direct pipeline from Russia and will be supplying Russian gas to Central Europe. Turkish government has shown its eagerness to be a part of the project by issuing permission for engineering survey in the project area.

Despite Turkish government’s expectations of increasing capital and prestige, Greece remains to be the main hub of the pipeline project on the European side. Turkey has a strategical role with being the country that joins the black sea with the land; however, the key position in the project is in Greece’s hands. Greece sees the project as a significant opportunity to help the country’s collapsing economy.

Although in a recent speech Tsipras stated that the project will not be named as “Turkish Project” in the Greece land, both Turkey and Greece highlighted that the bilateral relations between the two countries will certainly be affected positively by the project. From economy to politics, Turkish Stream project is expected to be profitable in many aspects.


Herdem Law Firm, Istanbul Turkey

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