On Monday Russia’s President Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan agreed to continue carrying out the Turkish Stream project suspended later past year against the backdrop of deteriorating relations between the two countries. An agreement to this effect was signed by the two countries’ energy ministers in Istanbul, where the Russian president is taking part in the World Energy Congress. The project envisions the construction of two branches of the main pipeline (each with a capacity of almost 16 billion cu. m. of gas) across the Black Sea by the end of 2019. The first and second branches are to transport gas to Turkish and European users, respectively.
The Day requested Serhii KORSUNSKYI, Ukraine’s Ambassador to Turkey in 2008-16, to comment on what the construction of one more bypass gas pipeline means to Ukraine and say how we, a transporter of Russian gas to Europe, should defend our interests.
“WE WILL LOSE 16 BILLION CU. M. OF TRANSIT GAS”
“It is bad news for us. For the signature of an intergovernmental agreement is a serious step which shows that, in all probability, at least one branch of Turkish Stream, which the Turks have so long been talking about, will be built. And should this happen, we will just lose 16 billion cu. m. of gas transited across our territory.
“On the other hand, I would not assess this agreement in categorically negative terms because the question is who will build this branch. This involves deep-sea pipe installation. Neither the Russians nor the Turks have this kind of technology. There are only a few European companies that can do this. I am not sure they will agree to deal with the Russians for fear of being affected by sanctions. So there are some questions about the further implementation of this agreement. But the very fact of signing it arouses concern.
“It is important to point out that the Russian-Turkish negotiations in Istanbul with participation of Erdogan and Putin also resulted in signing an agreement on setting up a billion-dollar-worth Investment Fund. Besides, the two leaders seemed to announce that they were going to finally draw up a free trade agreement next year. This is not a good signal for us or a stimulus for active work, either.”
“BRUSSELS MUST COMPLETELY BLOCK THE SECOND BRANCH OF TURKISH STREAM”
Maybe, we should take some actions to protect our interests?
“As far as I know, the dialog with Turkey is going on. The new ambassador has arrived and will begin to work actively as soon as he presents his credentials. Moreover, the presidents have also been meeting. The Turks know our position and our interests. Of course, we must work seriously. But the question of Turkish Stream is not part of bilateral Russian-Turkish relations; it is not a bilateral project. The European Union is standing behind the scenes of this project. One branch to Turkey is of interest to Russia, but what is of a much keener interest to her is at least one branch to Europe. And Brussels must completely block this, second, branch of Turkish Stream.
“For this reason, in my view, more active negotiations with the EU on a new post-2019 transit agreement is a key question for Ukraine today. It is of paramount importance that this agreement should stipulate that the point where the Europeans will be receiving gas must be located on Ukraine’s eastern border. In other words, the Europeans must conclude transit gas supply agreements not with Gazprom, as is the case today, but with Ukraine.
“The Europeans receive gas now on our Western border, but we need to transfer the gas reception point to the eastern border and conclude gas transit agreements with the EU, not with Gazprom. If we achieve this, this will, firstly, eliminate a source of corruption, of which we have been accused before, and, secondly and most importantly, we will be an integral part of the European energy space.
“These tasks are crucial, for Putin is now doing his best to deprive us of the role of a transporter of energy resources to Europe after 2019. It is for this purpose that Nord Stream 2 and Turkish Stream are being built.
“This is extremely bad for us economically and politically. And to prevent this, we and the European Union should make a political decision on the transit agreement and moving the point of Russian gas reception to the eastern border. This would be a weighty argument in our favor, also from the viewpoint of this Turkish Stream and other whims of Comrade Putin.”
“PUTIN WILL BEND OVER BACKWARDS TO GAIN DIVIDENDS FROM THE OIL PRICE HIKE AND THE INCREASED CONSUMPTION OF GAS”
What do you think of Putin’s statement that he is prepared to cut oil production in order to bring up the “black gold’s” price?
“Maintaining high oil prices is for Putin a matter of economic and political survival. Although not an OPEC member, Russia wholeheartedly welcomed the political statement of this organization about the oil production cut. After this, Brent oil prices rose by five dollars, only to slide back to the previous level soon.
“But Russia welcomes such steps in principle and is even trying to work with Saudi Arabia, taking advantage of the Riyadh-Washington quarrel. Moscow aims to make sure that oil production is reduced and, hence, fuel prices are raised. This undoubtedly represents a danger.
“I think we are going to hear more and more statements of this kind this year. Putin has reached an absolute deadlock due to an extremely bad economic situation. Next year Russia will have to refund 80-billion-dollar loans she has taken before. But there’s no place to take money from. Accordingly, Russia should either have the sanctions lifted or immediately cash in on oil and gas supplies. So Putin will bend over backwards to gain political and then economic dividends from the oil price hike and the increased consumption of gas.
“Putin let himself be spotted at the World Energy Congress in order to show the domestic Russian political clique that he is not in isolation but is an influential player who seems to have achieved serious results, such as the signing of agreements, etc. It is just another round of Putin’s struggle to have Russia unblocked and thus gain a political and economic benefit. With the elections coming up, the economy is in dire straits. For this reason, Putin’s participation in the congress is a policy that has an element of hype.”
