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President Vladimir Putin has suggested that Russia redirect natural gas supplies intended for the damaged Nord Stream pipelines to the Black Sea and the creation of a European gas hub in Turkey.
The newest development on the European gas sector comes shortly after three leaks--one in the Swedish zone and two in the Danish zone and--were discovered in Nord Stream 1 and 2 pipelines designed to ship natural gas to Germany. While initial Scandinavian investigations have determined “sabotage”, Russia has suggested that the U.S. stood to benefit from the damage. Moscow has previously said the leaks occurred in territory that is "fully under the control" of U.S. intelligence agencies.
Putin now says it’s possible to repair the pipelines, but that Russia and Europe should decide their fate.
"We could move the lost volumes from the Nord Streams along the bottom of the Baltic Sea to the Black Sea region and thus make the main routes for the supply of our fuel, our natural gas to Europe through Turkey, creating the largest gas hub for Europe in Turkey. That is, of course, if our partners are interested in this. And economic feasibility, of course" he said at an energy conference in Moscow, adding that the ball is now in the court of the European Union.
Three of the Nord Stream pipelines are currently damaged, leaving only one line of Nord Stream 2, which has an annual capacity of 27.5 billion cubic meters.
Not surprisingly, Turkey appears willing to play along with Putin’s proposed gas project. Whereas Turkish Energy Minister Fatih Donmez said on Wednesday that it was too early to comment on the proposal, he added that the issue should be discussed.
"It is the first time we heard of the issue of supplying Europe through alternate routes, mentioned by President Putin in his speech. Therefore it is too early to make an assessment. These kinds of international projects need feasibility assessments... commercial aspects need to be discussed. These are things that need to be discussed," Donmez has said.
Europe has vowed to cut dependence on Russian gas by at least two-thirds by year-end, and has managed to fill more than 90% of its gas stores ahead of winter with minimal help from Russia, though it has come at a huge cost.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.