Turkish Stream and its implications for the EU, Russia and TurkeyEnergy security is the key question for any state in the modern era, especially those highly industrialized and therefore heavily dependent on cheap, reliable and consistent energy supplies. When a group of such countries form a union situation becomes even more complicated as the presence of too many players with differing interests in terms of energy supply and security makes coming to a common agreement even harder; that is the case for the EU at the moment. The European Union is heavily dependent on external energy supply, especially gas supply from the neighboring Russia. However, it is looking for ways to prevent "the bad guy”, that is Russia from taking over the whole gas supply and its distribution over the region because of political threats this may ensue. Meanwhile, trying to diversify its gas supply by agreements with different countries, the EU countries are well aware of the fact that alternative routes of supply will not be as cheap as Russian gas. At the same time, Russia tries its best to keep its biggest market and for this reason, she came up with different very costly, but still strategic projects like South Stream, Turkish Stream, Nord Stream to restrict foreign invasion to its market share.
After the European Commission’s non-constructive approach to the implementation process of the South Stream project, Russian President Vladimir Putin said that Russia was unable to continue the South Stream gas pipeline project and would redirect its gas deliveries to other regions. "We will advance to the other markets and Europe will not receive these volumes, at least from Russia. We think that this is not corresponding with Europe's economic interests and causes damage to our cooperation. But this is the choice of our European friends," Putin stated. During his state-level visit to Turkey in December 2014, President Putin announced the cancellation of the South Stream project and its replacement by another pipeline carrying 63 (later it decreased to 31.5 bcma) billion cubic meters per annum (bcma) of natural gas from Russia to Turkey and south-east Europe. This line is projected to start from the Russian coast near the town of Anapa and run through the Black Sea to the Turkish Thrace. The pipeline will connect large gas reserves of Russia to Turkish gas transportation network and maintain reliable energy supplies for Turkey and south-east Europe. Due to the conflict between Russia and Turkey regarding Turkish shutdown of Russian jet, talks on the project were suspended unilaterally by Russian side. With the normalization of the political and economic relations between Turkey and Russia, Turkish Stream project is again on the negotiations agenda. However, realization of the project is depending not only on the Turkish-Russian relations but also Brussels’ decision. Considering the EU energy diversification policy and its aim to decrease dependence on Russian gas, it is important to evaluate advantages and disadvantages that the project offers to the sides and how realistic its construction is under the current political circumstances.
The Turkish Stream project bears special importance for Russia, since it is one of the main alternatives to the existing unreliable transit route to Central and Southern Europe through the Ukraine. Moreover, Russia will maintain its dominant role in the European gas market by creating an additional gas hub for southern Europe on the Turkish-Greek border. Adding to that, President Recep Tayyip Erdogan announced that Turkey is ready to split the financing of the project, meaning that Gazprom can save over $2 billion if construction costs are equally divided. 14 billion cubic meters of gas per year out of 31.5 bcm will be acquired by Turkey, with the rest going to Europe. Taking into account that Turkey wants to become the key energy transit country and a regional hub, realization of any pipeline project that passes through Turkey can be considered positively. On the other hand, considering the fact that Russia’s share in Turkey’s energy import is already around 55 percent, the completion of the Turkish Stream project would increase Turkish dependence on the Russian gas.
Since the 1990s, Turkey has recognized its potential as a major transit country in the region and has welcomed energy projects supported by the U.S. and the EU, as well as Russia’s projects intended to consolidate the European dependence on Russian gas. Following the BTC (Baku-Tbilisi-Ceyhan) oil pipeline, in 2006 4.6 bcma of Azeri gas from the Shah Deniz field began to flow to Turkey through the BTE (Baku-Tbilisi-Erzurum) pipeline, which was the first stage of bringing Azerbaijani gas to Europe. At the next stage, the Trans-Anatolian Pipeline (TANAP) aims to bring 10 bcma of Azeri gas to Europe through Turkey, with 6 bcma intended for Turkish consumption and then followed by its European extension – the Trans-Adriatic Pipeline. Since these projects are capable of decreasing the EU’s dependence on Russian gas, they were vividly supported in Washington and Brussels. However, a revival of the Turkish Stream project considered as a threat to European diversification policy in the view of the fact that Russian dominance in the Turkish energy market can hinder development of any alternative projects in future, especially transporting gas from Turkmenistan, Iran, Israel and Cyprus after political obstacles are removed. During inauguration of TANAP, Turkish President RecepTayyip Erdogan has repeatedly stated that the Turkish Stream project will not affect Trans-Anatolian Pipeline and TANAP has its own importance. Economic sanctions imposed by Russia after the jet downing, regular terrorist attacks, the inflow of Syrian refugees, internal Kurdish problems contributed to isolating Turkey from the West and severely hurt its economy. Quite naturally, Turkey, being trapped in such a difficult situation, wants to gain economic advantage from the project by demanding better price for the gas imported from Russia.
Unlike Turkish officials, EU Energy Chief - Maroš Šefčovič claimed that the Turkish Stream made "no economic sense” and in his Davos speech he added that TS "surpasses demand from potential customers, including Turkey and South Eastern Europe”.
Nowadays energy security is the key question for the European Union. Obviously, while in short term significant diversification away from the Russian supply and transit is very challenging for the European Union, it is quite attainable in the long term. Due to the regional insecurities in the neighborhood of the EU and Russian dominance in the European energy market, finding alternative sources is difficult. At this moment, supporting the Turkish Stream project would be counterproductive and definitely increase dependence on Russia. Moscow is well aware of the fact that The European Union as a group of mostly highly developed countries has a lot of contradictions regarding the energy issues between its members, so Russia is basically trying to gain from this lack of solidarity. On the other hand, increasing demand for energy raises tensions between the European Union member states. Taking into account that certain European countries such as Finland, Estonia, Lithuania, Latvia, Slovakia, the Czech Republic and Bulgaria are depending on Russia for more than 80% of their gas supplies, these concerns can be understandable.
Considering all of the above mentioned facts, we can conclude that through the realization of the Turkish Stream project Russia will achieve its following goals: strengthening its dominant role in the EU’s energy market by developing a new delivery route; completing the pipeline will allow Russia to deliver gas to Europe bypassing Ukraine and in this case Ukraine may lose its geopolitical relevance, transit revenues and political status as an energy link between Russia and the EU; lastly, Russia will reinforce its control over the Turkish market by adding a new route to the existing ones.
Although building new route from Russia will definitely increase the Turkish dependence on Russian gas, the project will strengthen Turkey’s role as a regional energy hub which can positively affect its economy and political status as a main transit country.
As for the EU, reality is that Russia in the short term will certainly maintain its dominance over the European market, however depending on the measures will be taken by the EU, circumstances can change in the long term. The EU can more or less achieve energy independence through focusing on a renewed effort on energy efficiency, diversification of routes, improving energy management and governance, investing more on alternative energy sources.
Alternatively, the EU must develop other infrastructure projects, mainly the Southern Gas Corridor which is based on the development of three pipelines: The Southern Caucasus Pipeline, TAP and TANAP. The pipelines which will connect Azerbaijan’s Shah Deniz II gas field to the European market, later can be expanded and be connected other producers from the Middle East, Central Asia and East Mediterranean. Moreover, Europe has to develop its LNG facilities, since there are several international suppliers available on the market such as U.S., Saudi Arabia, Qatar and Canada.
All in all, Russia’s new energy project – Turkish Stream puts Europe at a crossroad and it is high time for Europe to take decisive decision on its future energy security.