Gazprom confirms plans to construct only two lines of Turkish Stream

With growing European demand, Gazprom plans two additional pipelines to send Russian gas to Europe – Nord Stream 2 across the Baltic Sea, and TurkStream across the Black Sea.

“It’s not really a big surprise for the market and for now I think definitely the project looks more affordable than 63 bcm so that’s definitely much easier to conduct compared to the full capacity one in terms of both capability of Gazprom and also the ability of Gazprom to raise project financing from the guys in Europe and Turkey”, the Alfa Bank analyst noted. The Russian energy giant exported to Turkey 27.4 bcm a year ago. “If it shifts by a year, it will be nothing awful”, Medvedev said, according to Prime. Now around 40 percent of Russian gas goes to Europe via Ukraine.

“Speaking about designed capacity … we can talk that it will be created at volumes of up to 32 bcm”, Miller said, adding that the reduction in capacity was linked to Gazprom’s plans related to Nord Stream-2. The first line is to supply Turkey’s demand, with the rest flowing onward to central European states. A full intergovernmental agreement is not likely to be signed before the end of the year, Interfax understands.

The Gazprom chief said a draft intergovernmental agreement, envisioning the construction of a first thread and negotiations over a second, have been prepared.

Medvedev however insisted that political tensions were not a factor in the countries’ current failure to reach an agreement on the TurkStream project, with talks frozen last month due to disagreements over the price of Russian gas imports.

A Turkish energy official told Reuters on Tuesday that Gazprom had informed Ankara of its decision to halve the capacity of the planned TurkStream pipeline.

Last month, Gazprom signed a shareholders’ agreement with Europe’s BASF, E.ON, Engie, OMV and Shell, to build the Nord Stream 2 pipeline system, moving forward on an expansion previously opposed by European Union authorities.