http://tinyurl.com/mal9gk4

http://tinyurl.com/mal9gk4

“Russia's offer of a centre stage role in its revised gas export plans to Turkey, after President Putin killed off the South Stream pipeline to southeast Europe, has been greeted with more muted applause in Ankara than Moscow might have hoped,”[1] Reuters reports on December 4, 2014.

According to RT.com, Gazprom CEO Aleksey Miller said the energy giant will build a massive gas pipeline that will travel from Russia, transit through Turkey, and stop at the Greek border with an annual capacity of 63 billion cubic meters. The project will give Russia access to the Southern European market. Russia’s energy minister Aleksandr Novak said that the new project will include a specially-constructed hub on the Turkish-Greek border for customers in southern Europe.[2]

Severely affected by the drop in the oil prices, Russia is searching for alternatives and more than that to enable some regions’ dependency of Russian oil. In a visit in Turkey on December 1, Putin said Russia was ditching the Ukraine bypass South Stream pipeline, naming Turkey as its preferred partner for an alternative, undersea gas line to a hub on the Greek border. Russia’s fallback plan is to export more gas to Turkey. But, as with its new gas exports to China announced this year they need to sell cheaper.  Putin announced that Russia would grant Turkey a 6 percent discount on its gas imports from Russia for next year, supplying it with 3 bcm more than this year.

According to Today’s Zaman, after being rejected several times, an environmental assessment report (ÇED) was signed by the Turkish Environment and Urban Planning Ministry pertaining to this nuclear power plant shortly before Russian President Vladimir Putin arrived in Ankara for a visit on December  1, 2014. Signing the ÇED report cleared the way for the construction of the first power plant.[3] Also, Turkey's Renaissance Holding and Russia's state-backed private equity fund have agreed to jointly invest $400 million in Russia, in sectors such as healthcare and commercial real estate.

While Russia is trying to reduce its dependency on Europe after “Italy said in November that the project was not a priority, Austria reduced its support for South Stream and Bulgaria changed its energy policy (and its government) after robust lobbying from Brussels and Washington”[4], Turkey may fall into the trap of low prices by planning to have Russia build nuclear power stations in Turkey and importing more gas that will increase its dependence on Moscow. Russia is already Turkey's main energy supplier and sealing new deals in the energy sector will leave Turkey with no alternative plans.

[1] “Turkey frets after Putin picks it for major gas role”, Reuters, December 4, 2014, at the Internet address http://www.reuters.com/article/2014/12/04/turkey-russia-gas-idUSL6N0TN3NP20141204

[2] “Gazprom to build new 63 bcm Black Sea pipeline to Turkey instead of South Stream”, RT, December 3, 2014, at the Internet address http://rt.com/news/210511-russia-turkey-gas-pipeline/

[3]“ Turkey clears way for first nuclear power plant”, Today’s Zaman, December 1, 2014, at the Internet address http://www.todayszaman.com/business_turkey-clears-way-for-first-nuclear-power-plant_365864.html

[4] “Pipe down”, Economist, December 6, 2014, at the Internet address http://www.economist.com/news/europe/21635504-russias-cancellation-big-pipeline-has-taught-its-friends-lesson-pipe-down

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