Flying largely under the radar, progresson the TurkStream pipeline has been met with little attention. This is quiteunjust, as the project is a key piece of Gazprom’s future supply strategy. Notonly is the pipeline a necessary contribution to Turkey’s gas supply portfolio butit* second string also has effectively the same purpose as its once fiercelydebated predecessor, South Stream. TurkStream consists of two lines, each capable ofdelivering 15.75 billion cubic meters (bcm) of natural gas annually. The firstline is intended for the Turkish market, while the second is meant for Europe, comparableto South Stream before the project was scrapped in 2014. Therefore, TurkStreammay affect the supply situation in both Southeast and Central Europe, adding anothernon-Ukrainian supply route from Russia. And as with South Stream, the pipelineis about to pose a legal challenge to the European Union, (EU), its InternalEnergy Market (IEM) rules, and the EU’s energy policy more broadly.
Although the original South Stream projectwas plagued with political meddling, issues related to routing, and legal constraints, bringing additional gas volumes toEurope via the southern route (while circumventing Ukraine) is a goal tooimportant for Russia to abandon completely. Thus, it was no surprise when a successorproject—TurkStream, which follows two-thirds of the original SouthStream route—was announced upon South Stream’s cancellation in late 2014. The major difference betweenthese two projects is that TurkStream was never planned as a comprehensiveproject going all the way to targeted European markets. Instead, Gazprom implementeda new policy of incremental steps, building a pipeline to the important Turkishmarket first and effectively buying time to deal with the legal status of additionalinfrastructure.
Although TurkStream has been gettingrelatively less attention and media coverage than Nord Stream 2 in past several years, it came as littlesurprise when political and legal issues eventually surfaced. Although theseconcerns may seem secondary to current controversy surrounding Nord Stream 2, issues related to TurkStreamare indeed important. TurkStreammay not be as big as Nord Stream 1 and 2, but it is an integral part of Gazprom’sbroader strategy to cement its position as a major energy supplier in Europeand the EU without being dependent on the transit through Ukraine.
In Southeast Europe, a region whichwill not see its supply security affected by TurkStream, Bulgaria will again bea buffer country. Bulgaria, home of the project’s European landfall, was first confrontedwith related legal and political issues when South Stream reached Europe’sshores. In December 2019, Russian President Vladimir Putin accused Bulgaria of hindering TurkStream construction,increasing political pressure on the country and bringing back Bulgarian memoriesof Putin personallyscapegoating Bulgaria for South Stream’s failure in 2014. As a result, Bulgariais again caught between the EU and Russia, trying to navigate the EU’s Internal Energy market rules while maximizing the potential benefitsof being a transit country.
Bulgaria has been interested in becominga gas hub for quite some time, and TurkStream is an essential part of theirplan. Bulgarian Prime Minister Boyko Borisov reiterated boldplans for the country in 2019, but progress hasbeen rather slow. Additionally, plans to turn Bulgaria into a gas hub were recentlydealt a blow when the European Commission withdrew its support in the latestiteration of its Projects of Common Interest list. But whether or not Bulgaria’splans of becoming a gas hub come to fruition, TurkStream is progressing and hasalready started delivering gas to Bulgaria, NorthMacedonia, and Greece, as of the start of 2020. With the originaltrans-Ukrainian transit route, the TransBalkan Pipeline, sitting idle and the potential of gettingsupplies from the south, rerouting Russian deliveries to Europe is clearlytaking shape. And as with Nord Stream 2, the realization of the project is gettingcloser every day, making potential competitors, be it LNG terminals in Greeceor eventually Croatia, gas flowing through the Southern Gas Corridor, or the East Med Pipeline, uneasy at the prospect of moreRussian gas in the region.
In a case of history repeatingitself, the Energy Community issued its opinion in February 2019 that the pipelinesection from TurkStream through Serbia cannot be exempted from IEM rules, mostnotably the third-party access and unbundling principles. These are similar to objections the European Commission raisedagainst South Stream. Additionally, the EU has already made it clear thatTurkStream will be carefully scrutinized to verify that it adheres to IEMrules. Since Serbia is not an EU member and has yet to fully implement IEM rules, the situation there islikely to be different than other states along TurkStream’s route that are EU members(i.e., Bulgaria and Hungary). Gazprom is likely to implement a case-based approach,navigating between IEM provisions. In any case, Gazprom’s current projects are testingthe EU’s legal stronghold in two places at once—in the northwith Nord Stream 2 and in the South with TurkStream.
The general takeaway here is thatthe EU should find the sweet spot that balances its import needs and foreignpolicy concerns, most notably in relation to Russia. The EU currently deploys ad hoc solutions to hastily put out fires, insteadof assuming anoverarching, transparent position based on wide consensus. Their current method leaves room for Gazprom to jump on every opportunityto penetrate the European market. By not assuming a clear and firm position,the EU is creating a void that Gazprom is ready to fill, only perpetuating theproblem.
This recurring Russian pipeline story thusbears two important messages. First, Russia will not give up trying topenetrate the European market—a reality that EU countries should be preparedfor. Foreign supplies always pose a challenge to a certain degree, be it of a commercial,competitive, legal, or political nature, and supplies from Russia are indeed noexception, given their potential geopolitical implications. These challengeswill not go away with TurkStream. On the contrary, with decreasing indigenous production, the EU is likely to bemore import-dependent in the future. Second, ad hoc solutions are unviable goingforward. It is understandable that the EU does not have a common internalenergy policy, given its variety of internal energy mixes; however, the EU sorelylacks unity in approaching its external partners and unity will only be anasset for challenges to come.
Martin Jirušek is an assistant professor in the Faculty of Social Studies, Masaryk University in the Czech Republic. You can follow him on Twitter @MartinJirusek
Oil and Gas Russia Turkey
Image: Russian President Valdimir Putin and Turkish President Recep Tayyip Erdogan attended a ceremony to launch the TurkStream gas pipeline, January 8, 2020 in Istanbul, Turkey. Office of the President of Russia
