In a meeting organized by Foreign Economic Relations Board (DEIK) in Istanbul, Managing Partner of QU4TRO Strategies, Gokhan Taymaz highlighted that the Russia sanctions bill passed the U.S. Senate on June 14 has the potential to put Turkish energy companies at risk of facing international fines.
Taymaz explained the members of Energy Business Council that the Senate bill, approved on June the 14th by a margin of 98-2, includes new sanctions against Russia and Iran and it foresees punitive measures against entities that provide material support to Russia in building energy export pipelines.
He went on to say that “Germany fears that could pave the way for fines against German and European firms involved in Nord Stream 2, a project to build a pipeline carrying Russian gas across the Baltic. That risk also might apply to Turk Stream which will substantially enhance the reliability of gas supply to Turkey, as well as to southern and southeastern Europe”.
According to the draft bill on sanctions with respect to the development of pipelines in the Russian Federation, The U.S. President may apply sanctions to a person if the The President determines that the person knowingly, on or after the date of the enactment of the Act, makes an investment or sells, leases, or provides to the Russian Federation, for the construction of Russian energy export pipelines, goods, services, technology, information or support.
According to the analysis by QU4TRO, the old Iron Curtain countries, now partnered in an intitiative called “Three Seas Initiative”, will be the new battle field for market domination in between Russian Federation and the U.S. since the U.S. is becoming a net exporter of LNG starting 2018.
This also marks the end of the “Energy Independence” policy first introduced by Jimmy Carter in 1970s. President Donald Trump recently attended a summit of the Three Seas Initiative in Poland to promote U.S. natural gas exports as part of his new “Energy Dominance” policy.
Taymaz also pointed out that “Nearly all 12 countries in the initiative are heavily reliant on Russian gas and oil imports. This new policy change will have a significant impact on Turkey’s position as an energy transit route between Russia and Europe.”
On the other hand, The Senate’s bipartisan Russia sanctions bill ran into some trouble in the House of Representatives lately, raising fresh questions about whether and when the chamber will be able to agree on forcing President Donald Trump to take a harder line against Moscow.
The latest proposed change suggested adding a North Korea sanctions package to the legislation punishing Russia and Iran.
Turk Stream Chronology
On October 10, 2016, the Government of the Russian Federation and the Government of the Turkish Republic inked the Agreement on the TurkStream project.
In December 2016, South Stream Transport B.V. (a wholly-owned subsidiary of Gazprom) and Allseas Group S.A. signed the contract to build the first string of the TurkStream gas pipeline’s offshore section with an option for laying the second string.
On May 7, 2017, construction of the TurkStream gas pipeline was commenced in the Black Sea near the Russian coast.