2009-08-12 | Marcin Kaczmarski and Wojciech Konończuk

Prime Minister Putin's visit to Turkey demonstrates that both states are interested in joint energy projects, however, it is not certain if any of them will be implemented 

On 6 August prime minister Vladimir Putin paid a visit to Ankara, during which agreements were signed concerning all bilateral co-operation issues of interest for Russia and Turkey. The agreements, nevertheless, do not significantly change the energy situation in the region and are only a starting point for possible further negotiations.
Moscow's most important objective was to gain Turkey's support for the energy projects endorsed by Russia, and especially the South Stream gas pipeline. Russia demonstrated its ability to win Ankara's backing for projects of key importance from the Russian point of view. For the Turkish side, the important objective was to use the rapprochement with Russia to promote the concept of Turkey as an energy hub, to strengthen Ankara's position in the region and to gain a better bargaining position in the relations with the European Union. Even though no binding arrangements were made concerning the energy issues, the visit gave evidence for the development of closer relations between Russia and Turkey, observed over the last year, and demonstrated the potential for co-operation existing between the two states.

Outcome of the visit

Twenty agreements were signed during the visit, most of which concerned economic relations (including customs issues, the use of outer space, standardisation, etc.). With regard to energy issues, protocols were signed concerning gas, oil and the peaceful use of nuclear energy. The gas protocol enables Turkey to extend one of its three gas contracts (expiring in 2011, the contract in question provides for the supply of 6 billion m? of gas a year), and contains Turkey's consent to perform a feasibility study for the routing of the South Stream pipeline via the Turkish exclusive economic zone. This part of the negotiations also involved the Italian PM Silvio Berlusconi as Italy's ENI is a shareholder in the Blue Stream gas pipeline and a member of the South Stream consortium. Russia and Turkey declared their readiness to co-operate on the project to build the Blue Stream II gas pipeline to supply 16 billion m? of Russian Gas to the Middle East (Israel, Syria, Lebanon and Cyprus). Russia committed itself to considering the possibility of co-operation on the construction of the Samsun-Ceyhan oil pipeline - a Turkish-endorsed project to bypass the Turkish straits and reduce tanker traffic.

Significance of the agreements

The protocols signed are preliminary and formally do not change the energy situation in the region. However, they do introduce new elements to the games over the Southern Energy Corridor between Russia and the European Union. Moscow has demonstrated that, despite the signature, on 13 July, of the intergovernmental agreement on the construction of the Nabucco gas pipeline to transport Caspian gas to Europe via Turkey, its implementation is far from certain - Russia has managed to obtain Turkey's support for the competing projects (from Ankara's point of view, the Nabucco and South Stream projects are not mutually exclusive). In this way, Russia has stepped up pressure on the states participating in the projects endorsed by Moscow (Russia's possible participation in the Samsun-Ceyhan oil pipeline would in fact mean that the plans for the alternative oil pipeline from Burgas, Bulgaria, to Alexandroupolis, Greece, would have to be abandoned). Moreover, the agreement with Turkey would allow Russia to bypass the Ukrainian exclusive economic zone when constructing the South Stream (the Ukrainian government would probably grant no consent for the pipeline to be routed via its territory).
It is not clear at this stage which of the protocols signed during the visit will be implemented. The fact that the two countries have revisited the Blue Stream II project abandoned several years ago might suggest that its implementation is more realistic than that of the South Stream, which the Russians have been endorsing until now, because of the lower cost of investment and greater flexibility - the Blue Stream II pipeline would offer the possibility of transporting gas not only to Europe but also to the Middle East.
It is not certain whether Russia will participate in the Samsun-Ceyhan oil pipeline, especially given the fact that the Russians hold 51% of shares in the Burgas-Alexandroupolis project (the construction of both pipelines would not be economically justified as oil companies do not wish to stop using the Turkish straits). The signature of the Samsun-Ceyhan protocol was mainly a gesture to Turkey. Finally, the terms on which the Russians are to build Turkey's first nuclear power plant still have not been defined (Russia has clearly lowered its expectations concerning the price under pressure from Ankara).

Broader consequences of the visit

The visit of PM Putin to Turkey and the concessions made by the Russian side (including the preliminary consent to the construction of the Samsun-Ceyhan oil pipeline) indicate that Russia needs Turkey to implement its energy policy in Southern Europe and the Black Sea region, i.e. mainly to compete against the Nabucco gas pipeline project planned by the European Union member states. Moscow's attempt to bypass Turkey has failed - one of the reasons why Russia initiated the South Stream gas pipeline project in 2007 was the absence of an agreement with Turkey concerning the Blue Stream II project and Moscow's dissatisfaction with Ankara's policy to diversify the sources of energy. It was only after the Georgian war that the two countries started to build closer relations - they stepped up political co-operation in the region (including with respect to the Karabakh conflict). The agreements signed during the visit have political significance, but they also demonstrate the potential for more intensive bilateral co-operation, mainly in the energy sector.
For Turkey, co-operation with Russia is a convenient tool to pressure the Western states and Azerbaijan (in the negotiations concerning additional gas supplies), as well as an element in the implementation of Ankara's energy hub concept, i.e. the idea to establish Turkey as the key transit country for the transport of energy resources to Europe.
 

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