Turkey hopes to offer Russia a gas route into Europe

Reuters

• Russian gas flows through Ukraine stopped
• Turkey could provide alternative
• Capacity problems exist

Turkey hopes it can cash in on Ukraine’s decision to halt gas exports from Russia across its territory by offering Moscow an alternative route into Europe through its own network of pipelines for increased transit fees.

In the short term, however, its ambitions may be restricted by gaps in infrastructure.

As of January 1, Russian gas supplies to Europe through a pipeline running across Ukraine ceased, after Kyiv decided not to renew a prewar agreement with Moscow. 

It is estimated that closing the pipeline – the last main export route for Russian gas to Europe – will cost state energy company Gazprom around $5 billion in sales and $800 million in transit royalties for Ukraine. 

It is this gas flow and these royalties Turkey would like to tap into. 

Turkey is already connected to European markets through a network of pipelines. It carries gas from Russia via TurkStream 2, which links the two countries running under the Black Sea. The Trans Anatolian Pipeline carries Azeri gas. And a third link runs east to west for Iranian gas, some of which is used in the domestic market and some for sale to Europe. 

However, TurkStream is running at near capacity, pumping more than 15 billion cubic metres annually to clients in Europe, while the Trans Anatolian Pipeline – which connects to the Trans Adriatic pipeline running through Greece Albania and to Italy – pipes around 10 billion cubic metres a year, just short of its rated capacity. 

It would be something of an exaggeration to say that Turkey could immediately replace Ukraine as a transit route into Europe for Russian gas, according to Mehmet Öğütçü, chair of the London Energy Club, an energy forum.

However, there is some capacity for increased flows, while in the longer term potential is there.

“It will not be a huge amount because the pipeline capacity is not enough. You will have to invest in new pipelines and new pumping stations,” Öğütçü told AGBI. “It can, however, provide a marginal, incremental increase.”

• The state of the Russian economy in 2025 should be a concern for the Gulf
• Turkey closing in on nuclear energy aspirations
• Conflict hampering Mediterranean operations, says Chevron CEO

Where Turkey could benefit is through its increasing capacity to store gas in largescale facilities it is developing, Büşra Zeynep Özdemir, energy researcher with the Foundation for Political, Economic and Social Research, said. This could allow it to regulate supplies and become a centre for natural gas trading.

“Turkey has long had aspirations of not only being a country of natural gas transit but also a country where natural gas pricing is set,” Özdemir said. “With the Russia-Ukraine deal expiring, we can expect an acceleration of work by Turkey to reach this goal.”

These aspirations could be reinforced as Turkey increases output from its own gas fields in the Black Sea.

By 2026 Ankara expects domestic production to account for around 30 percent of its annual 50 billion cubic metres of consumption. This could free up a similar amount of imported gas to be shipped on to clients in Europe if Turkey’s infrastructure backbone is further braced.