Russian Gazprom’s board of directors will reportedly review the formation of a joint venture on late September with Turkey’s Botas for the TurkStream natural gas pipeline project.
Russian business news sources revealed that the joint venture company would be named TurkAkim Gaz Tasima A.S.
Russian media also noted that the joint venture would be formed for the construction of the onshore section of the TurkStream natural gas project.
The company will be created on a parity basis for the realization of the TurkStream project’s second line on Turkish territory.
The TurkStream project will start from the southern Russian town of Anapa on the Black Sea coast. Pipes will be laid over a 900-kilometer route under the Black Sea to reach the Thrace region of Turkey along the Black Sea coast. The TurkStream will send Russian gas to Turkey with the first of its two lines. The second line of the project will carry Russian gas to southern and southeastern Europe. The total capacity of the dual pipeline system is set to be 31.5 billion cubic meters. More than 250 kilometers of the first line of TurkStream has already been constructed.
Can the new Joint Venture get sanctioned by the U.S. administration ?
The latest sanctions bill signed by President Trump againts Russia has a controversial section that empowers the president to sanction any company that provides technology, services, investment or any support to Russian export pipeline projects.
The bill may have dangerous implications for European and Turkish companies that are partners in Russia’s planned Nord Stream 2 and Turk Stream pipeline to Germany in the North and Turkey in the South, including France’s Engie, the U.K.-Dutch Royal Dutch Shell, Austria’s OMV Group, Germany’s Uniper and Wintershall.
The bill also says “… that involve any person determined to be subject to the directive or the property or interests in property of such a person who has a controlling interest or a substantial non-controlling ownership interest in such a project defined as not less than a 33 percent interest.”
We assess that the 33 percent threshold likely is high enough to avoid disruptions at the giant Shah Deniz project in Azerbaijan, a chief alternative to Russia-sourced natural gas for Turkey.
That project could have been swept up by the earlier Senate-passed bill because Russia’s Lukoil owns a 10 percent share in an ongoing expansion, even though BP Plc is the lead operator.
The change also appears to give a green light to the Sakhalin 1 oil fields in Russia’s Far East, where Exxon Neftegas Limited, a subsidiary of Exxon Mobil Corp., has a partnership with two Russian companies that have a combined interest of 20 percent.
Bottom line; if Russia prefers to have an interest of more than %33 percent in the new Joint Venture, it might get sanctioned by the U.S. adminstration, although the bill also suggests that “The sanctions will be considered in coordination with U.S. Allies”.