Gazprom and Turkey agree to advance pipeline project

May 27, 2018
2 min read
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Russia’s Gazprom said on Saturday it had signed a protocol with the Turkish government and firm Botas on a planned gas pipeline project Turkstream that will move forward its construction phase.

The protocol concerned the land-based transit pipeline part of the TurkStream project, which Gazprom said meant that work to implement it could now begin. The construction of the overland section will be carried out by the joint-venture TurkAkim Gaz Tasima AS.

Turkey had delayed issuing a permit for the Russian company to start building the land-based parts of the pipeline which, if completed, would allow Moscow to reduce its reliance on Ukraine as a transit route for its gas supplies to Europe.

Gazprom also said it agreed with Turkish firm Botas to end an arbitration dispute in an out-of-court settlement on the terms of contract for supplying natural gas to Turkish consumers, but did not give more details.

Turkish President Tayyip Erdogan said separately on Saturday that Turkey and Russia had reached a retroactive agreement for a 10.25 percent discount on the natural gas the country buys from Moscow.

Turkistream is a gas pipeline project from Russia to Turkey through the Black Sea and further to the border of Turkey with neighbouring countries. The first gas pipeline is intended for the Turkish market, the second - for the countries of South and South-Eastern Europe.

The first gas pipeline will have a capacity of 15.75 billion cubic metres of gas per year. Construction of the offshore section of the gas pipeline, which began on May 7, 2017, is being handled by South Stream Transport BV, a fully-owned subsidiary of Gazprom.