Gazprom CEO: Turkish Stream's construction works will kickoff in 2018

Alexey Miller, chairman of Russian state-owned energy giant Gazprom, has announced that the construction of the Turkish Stream natural gas pipeline project will kick-off in 2018. Speaking to the state-owned Russian-language news station Russia-24, Miller gave details about the intergovernmental agreement signed between Turkey and Russia on Monday as well as the Turkish Stream project.

According to Miller, construction work on the Turkish Stream project will kick off in 2018 in accordance with the signed agreement. The construction and financing of the pipeline's coastal section will be the sole property of Gazprom, while the infrastructure of the Turkish side of the pipeline and the terminal building which will supply the gas to Turkey's domestic market, will be built by BOTAŞ Petroleum Pipeline Corporation, the state-owned crude oil and natural-gas pipelines and trading company in Turkey. Monday's talks have involved a discount plan for the gas provided to Turkey. Miller said the discount rates in natural gas will depend on the amount of gas transferred to the Turkish market.

The intergovernmental agreement on the Turkish Stream project, which will transfer Russian natural gas to Turkey and to the European countries through Turkey, was signed between Energy and Natural Resources Minister Berat Albayrak and Russian Energy Minister Alexander Novak in Istanbul on Monday.

Turkey, which is the second biggest consumer of Russian gas after Germany, imports around 30 billion cubic-meters of gas from Russia annually via two pipelines, the Blue Stream, which passes under the eastern Black Sea, and the Western Line through the Balkans.

Estimated to have a capacity of 31.5 billion cubic-meters through the two lines, the project's first and second lines will transfer Russian natural gas to Turkey and European countries, respectively. The project involves two more pipelines which will increase the capacity to 63 billion cubic-meters. On Monday, speaking at the 23rd World Energy Congress, President Recep Tayyip Erdoğan said that construction of another two lines aiming to carry Russian natural gas to Europe via the Turkish-Greek border will depend on demand.

A joint enterprise will be established under the scope of the project for the transit infrastructure to transfer natural gas to European customers through Turkey, according to Miller.

Stressing that the Turkish Stream project will not compete with the North Stream 2 pipeline project, which is planned to run between Russia and Germany, Miller said the target markets of the both projects are completely separate and the volume specified for the North Stream 2 project is much more than that of the Turkish Stream.