In the face of objections from the EU, Russia is starting to take decisive steps to build the Turkish Stream as an alternative to the South Stream pipeline that it shelved last year. The recent statement by Gazprom CEO Aleksey Miller that Russia will stop delivering gas to Europe through Ukraine when the current contract expires in 2019, and redirect transit to the Turkish Stream pipeline, can be considered as Russia's intention to build the Turkish Stream.
Even though there are many uncertainties and unknown parameters about the financial aspects of the project, Dr. Dimitar Bechev from the London School of Economics (LSE) LSEE Research on South Eastern Europe believes that the Turkish Stream project is realistic. "The Turkish Stream project has a strong prospect," said Bechev, adding that Russian politicians support the project and that another underlying factor is Turkey's demand for natural gas.
The academic underlines the importance of the Turkish gas market saying, "It makes a lot of economic sense for Gazprom to lock in the demand in Turkey. It is not just wholesale but also classification. There is a market to be captured and it is becoming much more competitive, because they would like access to other sources of gas."
However, Bechev says that he is being skeptical due to many uncertainties about the project. "What I am skeptical about, is whether the Turkish Stream can evolve into something larger than the Turkish market, as the main supply routes to customers in western and southern Europe. Why would Germany agree to buy gas at the Turkish-Greek border rather than the current Czech-German border at Baumgartner?" he said.
According to Bechev, in order to sell gas to the Turkish Stream, Gazprom has to be prepared to give away large parts of its revenue. "Beside this, there are already many agreements with other transit countries, so Gazprom owes them compensation if they want to sell gas from the Turkish border. Not to mention, also the huge costs of building a new infrastructure. These are all reasons why I am a bit skeptical about what will happen," he added.
Bechev believes that Russian-Turkish relations would gain more dimensions in the event of the realization of this project. "It will strengthen economic cooperation. If you take a broad overlook at bilateral relationships, you can see that it is too complicated to stop. These are two competing countries especially in the Middle East, but also elsewhere. If you learned how to coexist, to make business together and to benefit, it is not an accident that Turkey refused to join in Western sanctions against Russia. So they know that there is more to be made in bilateral relations and mutual benefits," he further commented.