No one really expected a shooting war between Russia and Turkey, a NATO member, over the downing of a Russian bomber after it reportedly violated Turkish air space. But there’s been some concern that economic relations between the two countries, once warm, could freeze over for the foreseeable future.
Yet on the very day of the incident, in which two Russian service members died, Russian Deputy Energy Minister Anatoly Yanovsky made it clear that Russia’s Gazprom would continue to supply gas to Turkey in accordance with their contract. “It could not have been otherwise,” he said.
That didn’t mean Russia wasn’t angry about the incident in which two Turkish warplanes shot down the Russian Su-24, which had been on a bombing mission near the border between Turkey and Syria on Nov. 24. Ankara said the Russian craft had violated Turkish air space and that for several minutes its crew ignored Turkey’s repeated request to leave. Related: Oil Crash Shrinks Russian GDP; Energy Minister Blames Saudis
Russia rejected that account, and President Vladimir Putin called the incident “a stab in the back delivered by accomplices of the terrorists.” In the meantime, Russia has demanded an apology, which Turkish President Recep Tayyip Erdogan says he’ll never issue.
Yet, true to Yanovsky’s word, Russia now says it not only will maintain its gas flow to Turkey under existing contract terms, but is ready to increase the supply, and is prepared to reopen stalled negotiations on the proposed Turkish Stream pipeline, which would ship Russian gas to Turkey via the Black Sea.
“Russia has gas,” Energy Minister Alexander Novak said Monday in an interview with Russia’s state-run broadcaster Rossiya 24. “Russian gas is fairly cheap. We have relevant infrastructure and we are definitely ready to supply and increase gas supplies [to Turkey].”
Far from expressing any grudge Moscow may hold over the shooting down of the Russian bomber, Novak said, “Economic and commercial cooperation must continue and it will be efficient for both parties.” Related: Warren Buffett Beats Elon Musk In Nevada
Novak said his country now supplies Turkey with 30 billion cubic meters each year, more than half of the 50 billion cubic meters that country consumes annually. But because of the current tensions between Moscow and Ankara, Turkey has been exploring alternative sources of energy.
Not necessary, Novak said. He told the Russian broadcaster LifeNews that Moscow is interested in resuming talks over Turkish Stream, which when completed could ship and additional 63 billion cubic meters of gas to Turkey, with some of it destined farther west via neighboring Greece.
“I think that this route would be very interesting and important for consumers in Central and Eastern Europe,” Novak said. “Therefore, in this case, there are prospects for the project to be implemented.”
Putin announced plans to build Turkish Stream in December 2014, but negotiations on its construction were suspended because of a disagreement over the price of the gas. Turkey’s downing of the Russian bomber meant an indefinite hiatus in the talks. Related: The New Cartel Running The Oil Sector
Now, though, according to Novak, Turkish Stream can become a reality if the European Commission builds the western extension of the pipeline. “Here it is extremely important to establish the appropriate infrastructure in Central and Eastern Europe,” he said.
In fact, Novak’s remarks echoed those of Putin at his annual news conference on Dec. 17, when he appeared to breathe new life into Turkish Stream. His only demand: “We need guarantees in writing from the European Commission that all routes … will become a priority with the EC’s support. If Gazprom’s Turkish partners bring us a document of this sort, we can move on.
“Unfortunately, it hasn’t happened for now,” Putin added. But if Turkey is willing to resume talks about the pipeline, it may be built eventually.
By Andy Tully of Oilprice.com
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