With the cold of winter drawing upon Istanbul, gas heating is slowly coming to the forefront of residents' minds. The seasonal switch, this year, however, coincides with two both competing and inter-twinning developments in the global gas industry; namely, the pumping of the first gas from Azerbaijan to Europe through a section of the Southern Gas Corridor (SGC) and the coming inauguration of the TurkStream pipeline, which will provide a southern export route for Russian gas to enter the EU market. Both targeting the European markets, the SGC and TurkStream pipelines will both traverse Turkey, making the country a transitory crossroads of natural gas from Russia and Azerbaijan. These two projects will enable Turkey to transform into a regional gas hub, a vital element of the European energy security and a meeting point for the energy interests of both Russia and Azerbaijan. Transit builds independence The TurkStream gas pipeline project was first initiated by Russia. The plan allows two, 930-km long subsea connectors laid out on the floor of the Black Sea to pump up to 15.7 billion cubic meters (bcm) of gas into Turkey. They are laid down to respectively supply consumers in Turkey and Europe with additional volumes of Russian gas. The first line, set to be inaugurated on Jan. 8, 2020, will increase the volume of annual deliveries to Turkey by nearly 16 bcm, sparking fresh concerns with the Russian gas dependence. Since the 80s, Turkey has been heavily dependent on imports of Russian gas, constituting the country's second largest consumer. The Turkish economy relies on Russian deliveries by up to 60% and, according to official statistics, annually consumes close to 55 bcm of pipeline gas, receiving at least half of this from Russia. This level of dependency has been a source of contention for Turkish policy makers, who are engaged in efforts to form a more diversified energy basket. Such efforts have been aided by the balancing grace of natural gas from Azerbaijan (9 bcm) and Iran (16 bcm), liquefied gas from the Middle East and the U.S. and the local harnessing of wind, solar and hydraulic resources. Plans for energy diversification initiated around a decade ago today provide Turkey with immunity from the potentially negative impacts of overdependence on Russian gas. While pipeline gas imports continue to increase thanks to higher contracted deliveries from Azerbaijan and Iran, as well as Russia, Turkey is continuously reducing the share of pipeline gas in its overall energy import. In 2018, the liquefied natural gas (LNG) imports went up to 20%, while the country's pipeline gas share decreased to 80%. Turkey is expanding its LNG infrastructure and has commissioned four LNG terminals. Two of these have come in the form of floating storage and re-gasification units (FSRU), while one constitutes the world's largest LNG storage facility, able to take in 263,000 cubic meters. The launch of the TurkStream pipeline is set to transform the buyer-seller nature of Turkish-Russian relations, setting to unite the countries as joint providers of pipeline gas to the third markets. For Turkey, the newly launched pipeline is both an imported gas provider and an instrument of becoming a transitory hub of Russian gas to Europe and beyond. The TurkStream’s second, southern line is set to pass through Turkey to take Russian gas to Bulgaria; from here, moving on to Serbia and, potentially, Hungary. This pipeline will make Turkey an actor with increased leverage in the Russian gas transportation business, and will strengthen its position in the global gas market while buttressing its energy independence overall. Russian gas travels south TurkStream’s second line is due to deliver gas to the Turkish-Bulgarian border where from it will be carried on by the Bulgarian distribution network to the border with Serbia, to potentially continue on to Hungary and eventually reaching the Gazprom’s mega storage facility in Baumgarten, Austria. Nevertheless, considering that the deadline for completion of the Bulgarian network is currently approaching, the chances are becoming ever-more likely that the project will not be completed on time. Regarding the protracted delays, President Vladimir Putin stated, while meeting with Serbian President Aleksandar Vucic on Dec. 3, in Sochi: “I want to say directly and openly that the Bulgarian leadership, after first disrupting construction of the South Stream pipeline and then more than once approaching us and asking to definitely build the TurkStream pipeline, seems now to be in no hurry to complete the section crossing its respective territory. Under external pressure apparently, it is proceeding with construction in a deliberately slow manner. If Bulgarian leaders do not want this project, we will find other ways for its implementing through southern European countries.” Bulgaria has awarded an international consortium lead and managed by Arkad Engineering, of Saudi Arabia, with a tender for the design and construction needed to upgrade the gas distribution network for the TurkStream project. The works are due to be finished by the beginning of 2020, coming to a total cost of 1.1 billion euros. It is worth recalling that the idea to build the TurkStream pipeline came to life when its precursor, the South Stream pipeline project, was terminated due to disagreements between Bulgaria and Russia. While engaged in the project, Bulgaria more than once stopped its works under the pressure of the European Commission and eventually didn’t give permission for its passing through the Bulgarian territory. Besides the absence of determination on the part of Bulgaria, the South Stream project has failed due to the lack of the Bulgaria-Russia mutually beneficial economic accords, including those on the local network modernization. The project was rather driven by the Russia-Ukraine conflict of interests and the piling bottlenecks of transiting through the Ukrainian territory. The South Stream’s partial replacement with the Turkish Stream has given Russia a flexibility that an EU member cannot provide, while also aiding Turkey’s highly-vaunted goal of becoming a regional gas hub. Despite delays experienced in the completion of the Bulgarian section of the pipeline, Serbian contractor Gastrans d.o.o. Novi Sad has worked at full speed, and is set to have ended the year presiding over a 400-kilometer distribution network extending from its Bulgarian border to connect with Hungary in the north. “Yes, we are ready, and the Serbian section is 90% complete,” President Vucic said on Dec. 3, adding that: “Still, we see today, regardless of how strange and sad it sounds, that Bulgaria is intentionally dragging its feet in the completion of its own respective section, despite our requests to provide for a Serbian gas transit through the territory of Turkey and Bulgaria.” Caucasian gas goes to Europe In the meantime, the Southern Gas Corridor continues to gain momentum. Initiated by the European Commission, the corridor's aim is to provide a supply route for natural gas from the Caspian and Middle East to Europe, thereby reducing the continent's dependence on Russian resources. The SGC’s largest component is the Trans-Anatolian Pipeline (TANAP). Inaugurated in 2018, the pipeline joins the European section of the SGC, the Trans-Adriatic Pipeline (TAP), going on from Greece to Italy. On Nov. 30, TANAP launced its first gas compression into the TAP with an official ceremony held at the Turkish-Greek border attended by President Recep Tayyip Erdoğan, President Aliyev and other heads of state, including Prime Minister Boyko Borisov of Bulgaria. The 16 bcm TANAP line can currently deliver 6 bcm of gas to Turkey per year while the remaining 10 bcm is destined for the European markets via TAP. Its transmission capacity may be increased to 24 bcm and further to 31 bcm if an additional investment is made. As such, the pipeline has a good potential to further contribute to diversification of Turkish and European gas supply sources. Though not fully completed, the TAP is to eventually connect with the Italian natural gas grid integrated into the overall European network from which the Azeri gas will have a potential to go as far as the U.K. while interconnecting with the gas markets of Italy, Switzerland, Germany, the Netherlands and Belgium. As such, natural gas from Azerbaijan is expected to reach the European markets in 2020, passing through Turkey via the 1,850-kilometer TANAP and traversing Greece through the 878-kilometer TAP pipeline which interlinks in the vicinity of Edirne, Turkey. Bulgaria may become the SGC's prime beneficiary, as its energy basket is 90% dependent on Russian supplies, EU energy officials say. To ease the burden, it can diversify its sources through contracting the pipeline gas from Azerbaijan, while developing its own alternative energy reserves and building up domestic LNG infrastructure. Rivals or partners? Developments regarding Turkey's new pipelines have been a cause for competition between Azerbaijan and Russia, threatening to shift the EU's dependence on Russian supply. Meanwhile, these developments are set to increase Turkey's leverage in decision-making on gas and strengthen its position of an energy hub overall. Plus, the pipelines will contribute to Turkey’s energy independence, decreasing the potential challenges posed by its over-reliance on Russian gas.