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. Last Updated: 07/27/2016

Deals Planned for Putin’s Turkey Trip

APSergei Shmatko speaking to reporters after talks with Turkish counterpart Taner Yildiz, left, in Ankara on Tuesday.
Inter RAO and Gazprom will sign agreements on energy projects with Turkish companies, Energy Minister Sergei Shmatko said at a news conference Tuesday.

Prime Minister Vladimir Putin is expected to visit Turkey on Thursday to work out details of several energy projects, including an invitation to take part in Moscow’s pipeline project, South Stream.

Turkish and Russian energy ministers said on Tuesday that numerous energy projects were waiting for the private sectors of each country.

Turkish Energy Minister Taner Yildiz said Turkish companies would sign agreements to cooperate with Russian firms in the oil, natural gas and power sectors.

Gazprom and Turkey’s Calik Holding will sign an accord to build a pipeline between the northeastern port of Samsun and a terminal at Ceyhan on Turkey’s Mediterranean coast, Shmatko said.

Increased oil output from the Caspian region as Kazakhstan’s Kashagan field plans to begin output will add additional tanker shipments via the Black Sea. Tankers have been delayed as much as a month in passing through the Bosphorus Straits because of weather and seasonal conditions.

Inter RAO, along with Atomstroiexport and Park Teknik were the sole bidders in a tender to build the nuclear power plant. Final approval of the deal has been delayed pending a price revision from the Turkish-Russian consortium.

The European Union and Turkey last month signed a transit deal for the Nabucco pipeline, which aims to reduce Europe’s energy dependence on Russia, introducing a new flow of gas from the Caspian and Middle East.

Putin is expected to promise that South Stream will be built quicker than Nabucco despite last month’s political fanfare and will seek to convince EU-candidate Turkey to allow Moscow’s 10 billion euro ($15 billion) project to carry gas from the Russian coast to Europe via Turkey’s Black Sea waters.

“These are rival projects, they’re not complementary. If one is successful, then the other should be postponed for 10 years. They are targeting the same customers, there is not enough resources and the funding is not there,” said Necdet Pamir, Turkish Committee member of the World Energy Council.

“And here, Russia needs Turkey to let the pipeline pass through its exclusive [territorial waters],” he said.

Turkish rejection of the project would force South Stream to go through the territorial waters of Ukraine, with which Russia has already experienced two gas feuds over the past three years.

Nabucco consortium members say their July accord has solved political problems and infighting that has slowed development of the pipeline, but Putin is likely to point out that the 31-bcm Nabucco has yet to secure any gas.

“Nabucco is a project for generations to come, we all know it has no gas at this time; South Stream has all the gas. For Nabucco, there are no upstream suppliers right now, it’s all lip service, and that is what Putin is likely to press,” independent energy analyst Haluk Direskeneli said. 

(Reuters, Bloomberg)