Home / TOPICS / Economics / Gas Wars: Turkey Tries to Push Russia Aside

Gas Wars: Turkey Tries to Push Russia Aside

Print Friendly, PDF & Email

Nikolay Pakhomov

The current outbreak of animosity between Russia and Turkey has had many consequences. One consequence, in the economic sphere, has repercussions far exceeding bilateral ties: a project to deliver Russian natural gas—first to Turkey and then to Europe—has been put on hold. This project, known as Turkish Stream, has been struggling, but still was arguably much closer to fulfillment than any of the alternatives. Many questions remain: not only whether Turkey can acquire adequate energy resources without supplies from Russia, but more importantly, whether any other possible supplier can build on its existing bilateral cooperation with Turkey and bring energy resources (especially natural gas) to Europe via Turkey, thus pushing Russia aside as a major supplier to Europe.

Consumption of natural gas in Turkey has steadily increased during the last few years and reached 1.7 trillion cubic feet in 2014. Almost all of this consumption is satisfied by export, primarily from Russia (57 percent in 2013). The growth of natural gas and energy consumption in general has been followed for the several last decades by stable and significant growth in Turkish economy. There is no reason to suggest that this positive trend will soon stop. However, at the same time, according to the U.S. Energy Information Administration, “because of rapid demand growth, Turkey’s annual natural gas consumption is approaching the annual capacity limits of the country’s import infrastructure (pipeline and LNG [liquefied natural gas]).”

Considering all this, it comes as no surprise that Moscow and Ankara were negotiating the deal for the Turkish Stream. For Turkey, it was continuation of cooperation with a familiar partner. For Russia, it was plan B after the South Stream project died—a new pipeline would provide capacity to increase export to Turkey and bring Russian natural gas to the border of Turkey and Greece, the doorstep of the European Union. The last fact is especially important: Russia accused Brussels of pressuring Bulgaria to stop the construction of South Stream. Since Turkey is not an EU member, Brussels would have had no say in the Turkish Stream project. After its construction, European consumers would have to decide on their own if they wanted to buy Russian gas from the Turkish Stream on the EU border.

Now one has to reevaluate the entire situation. The first question is: what are Turkey’s gas alternatives? Speculations are multiplying; there even have beensuggestions that gas from Israel could come to Turkey and later to Europe, although Turkish officials are eager to dismiss the idea. What other countries are in line to supply their natural gas to Turkey? Considering their political understanding with Ankara, Saudi Arabia and Qatar would be interested, but with the war in Syria and Shia-dominated government in Iraq, building a pipeline is not feasible, and LNG deliveries are always complicated and extremely costly.

The next option is Iran. Bilateral relations here are complicated, to say the least. But Iran is Turkey’s neighbor, and enjoys the second-largest natural gas reserves in the world. In addition, the process of lifting international sanctions has been launched. Whatever grudges exist between Tehran and Ankara, the European Union and its major members are eager to improve relations with Iran. In that context, Turkey might be mobilized by Europeans to become a bridge between Iranian gas riches and European customers. That seems plausible, considering the decade-long discussion on how Iran could help reduce Europe’s dependence on Russian natural gas.