Russian Turk Stream Pipeline Facing South Stream Challenges

Russia‘s Turk Stream pipeline is now facing a roadblock similar to what forced the cancellation of its predecessor, the South Stream pipeline.  On May 28, the Macedonian government, led by Prime Minister Gruevski, announced that it would only take part in the Turk Stream project if it meets with EU approval.  In order for the EU to approve the project, it must abide by the provisions of its Third Energy Package.  Bulgaria‘s decision to require  South Stream to be compliant with the Third Energy Package resulted in its derailment.  For example, this EU agreement requires that the company that owns the gas pipelines cannot also be the owner of the gas flowing through the gas transmission system.  Forcing Gazprom to relinquish its ownership of either its monopoly on gas deliveries or its transmission system will likely prove a show-stopper in terms of Moscow‘s ability to expand its existing political leverage over participating European countries via this new gas pipeline.

Macedonia is a key transit country for Turk Stream gas flowing into the European gas grid.  Absent this route, Turk Stream gas would be confined to Turkey and make it increasingly difficult for Russia to secure contracts, and particularly financing, for all four lines of the pipeline.  Just one of the proposed lines has enough capacity to supply all of Turkey‘s natural gas demands.  The Macedonian government feels that enforcing EU rules on Turk Stream will increase its chances of membership.  This is a sharp turn from the Macedonian government‘s past positions of opposing Western sanctions on Russia and encouragement of the Turk Stream pipeline.