In Russia, Turkey / Türkiye

By bne IntelliNews, October 11, 2016

News conference of Vladimir Putin and Recep Tayyip Erdogan in Istanbul on Oct 10, 2016 (Osman Orsal, Reuters)

News conference of Vladimir Putin and Recep Tayyip Erdogan in Istanbul on Oct 10, 2016 (Osman Orsal, Reuters)

Turkey and Russia signed an intergovernmental agreement on the strategic Turkish Stream natural gas pipeline project on October 10, following a meeting between President Recep Tayyip Erdogan and the Russian leader Vladimir Putin on the sidelines of the World Energy Congress in Istanbul.

The two leaders discussed a wide range of issues at the Istanbul meeting from deepening energy cooperation to the situation in Syria.

The signing of the agreement is a step forward for Turkey to realise its ambitious plans to become an energy hub in the region and marks a milestone in the process of the normalisation of Turkish-Russian relations that turned sour last year when a Russian bomber was downed by Turkish jets near the Syrian border. Moscow responded by imposing an array of economic sanctions that have hit Turkish exports and its tourism industry hard.

Tensions between the two counties also threw the future of key energy projects – the Turkish Stream and the Akkuyu nuclear power plant – into doubt. But Ankara made diplomatic overtures this summer to Moscow to mend ties. Russia has responded positively to Turkey’s efforts for the normalisation of the relations.

Gazprom pipeline routes to Europe. Capacity figures listed in map have changed, with Turkish Stream capacity halved and Nord Stream doubled as of Sept 2015

Gazprom pipeline routes to Europe. Capacity figures listed in map have changed, with Turkish Stream capacity halved and Nord Stream doubled as of Sept 2015

The Turkish Stream deal envisages the construction of two branches of the gas pipeline across the Black Sea bottom, CEO of Gazprom, Alexei Miller, told journalists, ahead of the Erdogan-Putin meeting. The first branch will supply gas directly to Turkey, while the second is to be used to deliver gas to European countries through Turkey, Miller said, according to RT.

A joint venture may be set up to construct the second line, Russian Energy Minister Alexander Novak said. “A Russian company will build and own the offshore segment of the first line; a Turkish company, most probably Botas, will own the onshore segment for Turkish consumers,” TASS quoted the minister as saying.

In December 2014, Turkey and Russia signed a memorandum of understanding for the construction of Turkish Stream. With an estimated price tag of €11.4bn, the project’s four-strand pipeline would carry a total of 63bn cubic metres (cm) of gas per year to Turkey and to southern Europe via Greece. Turkey will receive 14bn cm of that amount and the rest would be delivered to Europe.

Speaking at a joint press conference with Erdogan in Istanbul, Putin said Russia will again open up its markets to some Turkish agricultural products. “We also agreed on a natural gas price discount mechanism as part of the Turkish Stream deal and to intensify military contacts,” the Russian leader added.

For his part, Erdogan said the two countries will accelerate the process for the Akkuyu project. The issues related to Syria and Turkey’s Euphrates Shield operation as well as cooperation regarding humanitarian aid to Aleppo were also discussed, according to Erdogan. Russia and Turkey will also explore cooperation in space technologies.

Despite their deepening cooperation in energy and the shared understanding of the need for humanitarian aid, the two countries still seem to be far from finding a common ground to reconcile their conflicting interests in the Syrian conflict. Russia is one of the closest allies of Syrian President Bashar al-Assad, while Turkey supports opposition groups there.


Russia and Turkey sign gas deal, seek common ground on Syria as ties warm

By Olesya Astakhova and Nick Tattersall, Reuters, Monday, Oct 10, 2016

Turkey and Russia signed an agreement on Monday for the construction of a major undersea gas pipeline and vowed to seek common ground on the war in Syria, accelerating a normalization in ties nearly a year after Turkey shot down a Russian warplane. Turkish President Tayyip Erdogan hosted Russia’s Vladimir Putin at an Ottoman-era villa in Istanbul for talks which touched on energy deals, trade and tourism ties, defense and the conflict in Syria, where the two leaders back opposing sides.

“Today has been a full day with President Putin of discussing Russia-Turkish relations … I have full confidence that the normalization of Turkish-Russian ties will continue at a fast pace,” Erdogan told a joint news conference.

The warming relations between NATO member Turkey and Russia comes as both countries are dealing with troubled economies and strained ties with the West. Putin said Moscow had decided to lift a ban on some food products from Turkey, imposed after the Turks shot down a Russian fighter jet near the Syrian border last November, and that both leaders had agreed to work toward the full-scale normalization of bilateral ties.

They signed a deal on the TurkStream undersea gas pipeline, which will allow Moscow to strengthen its position in the European gas market and cut energy supplies via Ukraine, the main route for Russian energy into Europe.

The plan for TurkStream emerged after Russia dropped plans to build the South Stream pipeline to Bulgaria due to opposition from the European Union, which is trying to reduce its dependence on Russian gas.

Erdogan also said plans for a Russian-built nuclear power plant in Turkey would be accelerated. Time lost on the Akkuyu project because of strained relations would be made up, he said. In 2013, Russia’s state nuclear corporation Rosatom won a $20 billion contract to build four reactors in what was to become Turkey’s first nuclear plant, but construction was halted after the downing of the Russian jet.

Deep divisions on Syria

Putin received Erdogan in a Tsarist-era palace outside his home city of St Petersburg in August, when the two leaders, both powerful figures ill-disposed to dissent, announced plans for an acceleration in trade and energy ties. But progress on Syria, over which they remain deeply divided, has been more problematic. Erdogan described the topic as “very sensitive”, but said he had discussed Turkey’s military operations in Syria with Putin on Monday.

Both men said they had agreed on the importance of delivering aid to the city of Aleppo, whose opposition-held eastern sector has been encircled by Russian-backed Syrian forces for all but a short period since July. “We have a common position that everything must be done to deliver humanitarian aid to Aleppo. The only issue is… ensuring the safety of aid delivery,” Putin said, adding he had agreed with Erdogan to intensify military contacts.

Russia has backed Syrian President Bashar al-Assad with a year-long air campaign against the rebels fighting him. Turkey backs the rebels and wants to see Assad out of power. On Saturday, Russia vetoed a French-drafted U.N. Security Council resolution that would have demanded an end to air strikes and military flights over Aleppo. A rival Russian draft text failed to get a minimum nine votes in favor.

Erdogan said there would be further talks with Russia over the conflict in Syria. But there was little sign of any concrete progress toward reconciling their differences.

“We discussed … how we can cooperate on this matter, especially on humanitarian aid to Aleppo, what strategy can we implement so people in Aleppo can find peace,” Erdogan said. “We will come together with our foreign ministries and top military leaders and intelligence officers.”

Related news:
Address by Vladimir Putin to World Energy Congress on Oct 10, 2016, published on website of The Kremlin

Russia ends oil pipeline service agreement with Ukraine, RT.com, Oct 13, 2016

Moscow has ended the contract to maintain oil pipelines in Ukraine. The order was signed by Prime Minister Dmitry Medvedev and details published on the government website.

According to the 1995 agreement, oil pipelines passing through Ukraine were operated by subsidiaries of Russia’s oil transportation monopoly Transneft. However in February 2016, the Ukrainian section of the pipeline was sold to a Swiss-registered company, International Trading Partners AG.

Thus the Kremlin said further Russian participation in the agreement is “impractical.” The deal was approved by Russian and Ukrainian antitrust agencies at the end of 2015.

International Trading Partners AG is registered in St Gallen in Switzerland, and is controlled by German Anatoly Schaefer, Interfax agency reported. According to Ukrainian media UNN, Schaefer has Moscow residency, and the money for the transaction was kept in a Moscow bank.

Before the sale, the pipeline was the subject of litigation between Russia’s Transneft and Kiev. In March 2015, the Supreme Economic Court of Ukraine rejected the complaint from Transneft on Kiev’s decision to nationalize the section of the pipeline that runs through the country.

Transneft uses the pipeline to supply diesel fuel to Ukraine. In September, Ukraine imported 150,000 tons of fuel.

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