Gazprom begins Turk Stream construction

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Gazprom begins Turk Stream construction

Gazprom has decided to begin construction of the offshore section of the Turkish Stream pipeline, said the head of Gazprom. “We made the decision at Gazprom on the beginning of construction of the offshore section of the Turk Stream pipeline,” Alexei Miller, Gazprom chairman, said recently.

In December 2014, Russia’s Vladimir Putin announced the scrapping of the South Stream pipeline project due to a disagreement between Moscow and the European Union countries. Putin proposed a new route to deliver the gas to Europe through Turkey that was dubbed the “Turk Stream.”

The 1,100-km Turkish Stream is to deliver 63 billion cubic meters of natural gas per year through four parallel lines. An estimated 47 billion cubic meters will reach the Greek-Turkish border. The remaining 16 billion cubic meters of gas are to be allocated for Turkey’s domestic use. Russia currently sends natural gas to Turkey via the Blue Stream and Trans-Balkan pipelines.

Turkish official sources told the press that Gazprom had only started building one of the four lines that will carry the 16 billion cubic meters of gas for Turkey’s domestic consumption, which will replace the 14 billion cubic meters of gas Turkey receives via the Trans-Balkan pipelines.

They added that the company has not yet begun the construction of the other three lines, which will carry Russian gas to Europe. They did not say when the construction of these lines would start.

“There is a preliminary agreement, which has not been adjusted yet. Now we have a common vision of the discount formula (for natural gas imports) with our Turkish partners, I think that soon we definitively will sign this agreement,” said Miller.

Turkey’s Petroleum Pipeline Corporation, BOTAS, the main Turkish importer of Russian gas, previously asked for a discount from Gazprom on the sale of natural gas in late 2014. Gazprom announced that the company was working on a detailed price package in line with the discount request from Turkey.

However ongoing negotiations have not produced an agreement despite the Turkish energy minister announcing a 10.25 percent discount was imminent in early 2015.

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