Putin and Erdogan Sign Turk Stream Agreement
After several years of major swings in the bilateral relationship between Russia and Turkey, the two countries finally signed an agreement on Monday for the construction of the Turk Stream natural gas pipeline project. The significant mutual strategic interest that this project serves has given it a certain inevitability, leading to the joint session yesterday between President Putin and President Erdogan that not only formally launched this energy infrastructure initiative, but also moved forward other major projects, including the Akkuyu nuclear power plant project that will also be built, operated and partially owned by Russian state-owned enterprises.
Turk Stream has been in discussion since December 2014, when the project was announced in the immediate aftermath of Moscow giving up on its South Stream pipeline project. South Stream was to deliver Russian gas across the Black Sea into Bulgaria and onto Southern, Central and Eastern Europe. The deal was scuttled in the face of EU opposition and, ultimately, by Bulgaria’s decision to defer to the EU’s wishes — much to the frustration of Moscow.
Turk Stream is envisioned as another means to circumvent Ukraine in the delivery of natural gas to Europe. While South Stream aimed to put Russian companies into ownership positions vis-a-vis the pipeline itself, as it transited various European countries, Turk Stream, if both lines are realized (one supplying the Turkish market and the second bringing Russian gas through Turkey to the Greek border), would likely have Russia settling for somewhat less control over its delivery network. That said, the initiative is likely to involve a concerted effort on the part of Gazprom — and the Kremlin — to exert as much influence and ownership as possible of the supply chain and infrastructure contracts that would likely ripple forward, were Greece and other states persuaded to sign onto to this new delivery channel for what is likely to be competitively (and strategically) priced Russian gas for the region.
More broadly, this announcement formalizes a new era of close economic ties between Russia and Turkey, positions Moscow to have more leverage over Southern, Central and Eastern Europe with regard to energy supply and dependencies (as well as the large-scale construction projects that it will likely bring to these countries) and undermines the strategic role and revenue streams held by Ukraine and its neighbors as long-time transit countries for Russian gas.