How much gas will Russia be able to supply on a new gas hub? Creation of a gas hub in Turkey gains steam. In its framework the exchange will be open, which the state company on management will begin to control energy markets of EPIAS. The main issue today is what volumes can be realized at this exchange and how much natural gas can technically be delivered from the territory of the Republic of Turkey to the countries of Europe.

On fragments of South Stream

At the end of 2014 the story of the South Stream project came to the end. It assumed construction of a system of gas pipelines with capacity 63 billion cubic meters in a year from the Black Sea coast of Russia to the coast of Bulgaria and further to Northern Italy, Hungary and Austria. On its fragments there was a Turkish Stream project, more modest on scales, which power as a result made 31.5 billion cubic meters and the gas pipeline was stretched only to the coast of Turkey, without coming to the territory of the European Union to avoid action of norms of the Third power package. «The Turkish stream» consists of two threads on 15.75 billion cubic meters. The first nominally is intended for gas supply of the Turkish consumers. There are volumes on it, which earlier were pumped over through the territory of Ukraine, Moldova, Romania and Bulgaria (through the Transbalkan gas pipeline). The second thread provides with natural gas consumers of the Balkan Peninsula and Hungary. Commissioning of «The Turkish stream» at the beginning of 2020 came at an extremely bad period. And it was not only the difficulties which met the gas market because of the anti-covid restrictions. The main problem consisted in most Turkey which economy was already in crisis by that time. Its falling led to reduction of demand for energy carriers. In particular, it was reflected on natural gas. Having set a record in 2017 (51.6 billion cubic meters), since 2018 demand on gas did not rise higher than 48 billion cubic meters. And only in 2021 at last it was succeeded to update historical maximum – 57.3 billion cubic meters. During the same period the Russian deliveries also suffered. They reached a record in 2017 (29 billion cubic meters), and were reduced further, having fallen in 2020 to 16.4 billion cubic meters. The next year they increased by 63% (to 26.7 billion cubic meters). But by that time Turkey had another one import channel – 6 billion cubic meters from Azerbaijan.

Turkish gas knot

For many years Turkey nourished ambitious idea to become big gas transmission knot and to develop own large-scale deposits. Probably in 2023 gas production will begin on the Black Sea fields of the republic. Ankara became stone obstacles, preventing to realize the EastMed project which affects the shelf of Northern Cyprus. It is known that Northern Cyprus is not present on the majority of political maps but it exists in reality. Turkey studied possibility of supply of gas through the territory from Israeli fields Leviathan. Long time it was interested in realization the disgraceful Nabucco project assuming the organization of pumping of gas from Iraq, Iran and other so attractive countries. Nabucco succeeded more modest pipeline «The southern gas corridor». It provides delivery not only 6 billion cubic meters of the Azerbaijani gas to Turkey but also 10 more billion cubic meters to the European Union countries. Negotiations on possible extension of this project and doubling of pumping in the EU are now conducted. But accurate arrangements are not present so far, and it will be possible to realize this project not earlier than the second half of the 2020s. Also Turkey has an opportunity to receive about 10 billion cubic meters of gas from Iran. In recent years, these gas transmission facilities have often been subjected to terrorist attacks, and supplies were interrupted. Besides, the republic has large view of regional scales capacities for LNG reception. But for providing liquidities of a new gas hub the liquefied natural gas in the current conditions is of little use as there is no surplus of the offer, and all volumes, which Ankara receives, it uses for the needs. Actually, the only pipeline which as of 2022 can provide additional supply of natural gas is «The Turkish Stream». In annual expression these volumes at the current (!) level of demand from Turkish and the European consumers can make about 5 billion cubic meters. It is good from a point sight of the organization of further deliveries –there is a necessary infrastructure for pumping of such volume in the territory of the Balkans. But it is not enough as for ambitions of Turkey, so and for the solution of the tasks voiced by the president of Russia.

Three more «Turkish Streams»

Speaking at the forum «Russian Power Week», Vladimir Putin said: «The lost transit volume on «Northern Streams», on a bottom of the Baltic Sea we could move to the region of the Black Sea and make thus the main routes of supply of our fuel <…> Turkey, having created the largest in Turkey gas hub for Europe». That is the maximum program is to redirect all volumes with northern corridor of pumping to the south and further through Turkey in the European Union. Creation of a gas hub and realization through it at least 5 billion cubic meters are possible to consider as the program at least, which is a step on the way of realization of a maximum program. Doubling of power of «The Turkish Stream» can become the second step. It is obvious that to redirect 100% of volumes from the North to the Black Sea today not is obviously possible as it does not allow making productivity of gas transmission capacities. But by preparation for construction of South Stream on territories of Russia the Southern Corridor project was implemented (not to confuse to «Southern Gas Corridor»). It assumed creation of the western and east routes to compressor station «Russkaya». Only the western route was completely realized. It provides delivery of 31.5 billion cubic meters to «The Turkish Stream». Works on east route were suspended after refusal of South Stream, but a few years ago they renewed. Actually capacities which will allow delivering 31.5 more billion cubic meters to Turkey are already under construction (it is approximately equal to dropped out from operation Polish site of the gas pipeline Yamal-Europe). More precisely, they will allow delivering this gas to the Black Sea coast of Russia. And further there is a question of construction two more strings of the sea gas pipeline. It would be difficult to involve the western contractors before February, 2022 («The Turkish stream» falls under the sanctions of the United States stated in the law «About protection of energy security of Europe»), and it is impracticable under current conditions. Respectively, there is a question: do we or friendly countries need pipe-laying vessels? Or the second part of «Turkish Stream» will make sharp turn and will pass through Abkhazia and Georgia? The last one would be unexpected but unrealizable. Nevertheless theoretically within two-three years it is possible to put on the Turkish hub more 31.5 billion cubic meters of Russian gas. But while it will have nowhere to submit: the Balkans territory does not have necessary capacities to receive such an amount of «blue fuel». That is there will be negotiations with buyers who will have to find money for construction of new gas pipelines. It will be necessary to double the received capacities to redirect completely deliveries from the north to the south. That is as a result it is necessary to construct three more «Turkish Stream» in addition to the operating. Appropriate power needed create in the EU. Even theoretically implement it before the 2030s seems unrealistic. The gas depersonalization, change of its «registration» to the Turkish can simplify negotiations with buyers. That is the Turkish partners have to sell it. Iranian suppliers can be also interested in such a scheme. Ankara, according to open information, conducts negotiations with different manufacturers (including Iran). Allegedly, at the end of the flowing – the beginning of next year the schedule for creation the Turkish gas hub will be presented to the public.