Rivalry for good: Will Turkish Stream and TANAP complement each other?

They in Turkey expected a serious clash between TANAP and Turkish Stream. This is why those projects were in the spotlight during the past World Energy Congress in Istanbul.

While speaking at the Congress, Russian President Vladimir Putin said that he had discussed Turkish Stream with President Recep Tayyip Erdogan and both sides were committed to realize it.

Erdogan said that he was looking forward to that project as it could help Turkey to become a transit country for energy supplies to Europe. “We have already realized the Blue Stream project. Now we are building TANAP, which in couple with TAP, is supposed to become a new corridor for gas to Europe. This is very important to us. We also give high priority to the Caspian Sea and are considering ways to pump Turkmen gas,” the Turkish president said.

Turkish Prime Minister Binali Yildirim said that Turkish Stream implied a lot of benefits for Europe. “It will ensure energy security in the region. So, Europe has nothing to be worried about,” Yildirim said.

And what is the future of the Azerbaijani project of TANAP? Some time ago, Turkish Foreign Minister Mevlut Cavusoglu suggested integrate it with Turkish Stream. “We are planning to integrate Turkish Stream with TANAP, which is part of the Southern Gas Corridor from Azerbaijan via Georgia and Turkey to Greece and Italy,” he said.

He said that the first line of Turkish Stream was supposed to pump 16bn c m a year, with the unused gas to be pumped to TANAP. “We are going to finish this (integration of the two pipelines – edit.) by 2018. This gas will go to Europe,” Cavusoglu said.

Turkish Stream is a concern not so much for Europe as for Ukraine, who is afraid of losing part of the Russian gas transit to Europe. CEO of Naftogaz of Ukraine Andriy Kobolev said earlier that even one line of Turkish Stream would have negative consequences for the Ukrainian gas network. “The estimated capacity of the pipeline is 55bn c m, so, even one line will cause us losses of $570mn a year,” Kobolev said.

The capacity of TANAP is supposed to be 16bn c m - 6bn c m for Turkey and 10bn c m for Europe. In the future it may be raised to 31bn c m. The sides to the project - BOTAS of Turkey (30%), SOCAR of Azerbaijan (58%) and BP of the UK (12%) – are planning to launch it in mid-2018. The cost of the project is estimated at $10bn-11bn.

Once launched, TANAP is supposed to be connected to TAP, which is to be ready by early 2020. TAP will be 520 km long and will pump 10bn c m (20bn c m in future) from the Caspian Sea region and the Middle East via Greece and Albania and the Adriatic Sea to Italy.

Experts say that the Nabucco project may also be revived. If so, the hub on the Turkish-Greek border will have several routes to Europe.

Integration of Turkish Stream and TANAP means that they will stop being rivals and will stop any future conflicts of interests.

During the Congress Vice President of SOCAR Elshad Nasirov said that Azerbaijan was ready to use the capacity of Turkish Stream. If he keeps his promise, the European Commission will have no more arguments against the project.

The starting point of the Turkish Stream is the Russian coast of the Black Sea. The point where Turkish Stream can join TANAP is yet unknown. TANAP is a system of gas pipelines with a total length of 1,800 km, running from the Georgian-Turkish border to the Turkish-Greek border. Under current geopolitical circumstances, this is a risky venture. But TANAP has a big advantage: its gas is in demand. And if integrated with Turkish Stream, it will pave the way for a Russian-Azerbaijani gas alliance – a new window of opportunities for not only Azerbaijan and Russia but also Iran.

According to Dunya, a Turkish centrist-oriented newspaper, Gazprom is carrying out large-scale geopolitical maneuvers: if it turns Turkish Stream and TANAP from rivals into partners, it will strengthen its positions in Ukraine and the EU and will preserve its dominance in Europe.

President of Azerbaijan’s Oil Research Center Ilham Shaban believes that if fully implemented, TANAP will become the biggest infrastructure project in Turkey. “Turkey is keen to realize it and to involve there as many countries as possible. Particularly, it would like to pump has from the north of Iraq and Turkmenistan,” Shaban said in an interview to EADaily.

He believes that Turkey is trying to enhance its energy significance and to develop its energy infrastructure. But its key goal is to become closer to the EU. “Azerbaijan can hardly supply it with more than 6bn c m. Even if it launches its new offshore field in Apsheron, it will be able to pump just 5bn c m more. So, Azerbaijani gas will not be able to replace Russian gas even if Turkey and Russia stop their renewed gas cooperation,” Shaban said.

He does not see any reasons for Russia to hurry with Turkish Stream. “For the EU the top project today is the Southern Gas Corridor. Besides, Russia still has obligations to pump gas via Ukraine and will not be able to resend that gas to other countries till 2019. So, the Russians will build Turkish Stream exactly in 2019. As a result, the exports to Turkey will grow from 27bn c m in 2015 to 30bn c m in 2020, where 15bn c m will be direct supplies from Russia. This means that the gas will be cheap,” the expert said.

But let’s not forget that today the Europeans need not so much gas as no more Russia’s presence on their gas market. Their cover is diversification. But their real concern is the reviving political contacts between Russia and Turkey.

Energy projects are an effective means of pressure. Both TANAP and the Southern Gas Corridor are top priorities for Azerbaijan. So, any changes there will cause concern in Baku.

Unfortunately, a big geopolitical game is starting over these gas pipelines, with somebody trying to make serious changes to Europe’s energy map. Turkish Stream will be a signal for those forces. The U.S. and the EU are obviously displeased with renewed Russian-Turkish contacts and will certainly try to wreck them.

Maksud Talibli (Baku), specially for EADaily