Gas discount offered to Turkey by Russia high enough – expert

The gas discount offered by Russia’s Gazprom to Turkey is high enough and Turkey’s refusal to accept it is not quite a correct attitude, said Stanislav Pritchin, research fellow of the Center for Central Asian, Caucasian and Volga-Urals Studies of the Institute of Oriental Studies (Moscow).

It is very difficult to predict who will make concessions in this issue, Pritchin told Trend on March18.

“Possibly, Gazprom can meet Turkey halfway, however, anyway, a 10.25-percent discount is quite considerable,” said the expert, adding that this issue is debatable.

“It includes many other issues, as well as the construction of the Turkish Stream gas pipeline from the implementation of which, Turkey will get a lot of bonuses,” said Pritchin. “In this regard, it is not quite right to ask for a greater discount.”

Turkish media reported on March 17 that Turkey’s BOTAS declined to sign an agreement with Russia’s Gazprom on a 10.25-percent discount on the Russian gas supplied to Turkey. The refusal to sign the agreement came after the discount rate proposed by Russia did not suit Turkey.

A BOTAS spokesperson told Trend on March 18 that the reason is that the Russian side demanded additional concessions from Turkey on construction of the Turkish Stream pipeline. However, the company didn’t specify what kind of concessions.

Pritchin pointed out that Turkish representatives haven’t officially announced turning down Gazprom’s proposal. The expert believes that spreading of such information by the Turkish media seems to be an attempt to put media pressure on Russia by again showing the desire to get greater discount.

He added that it is necessary to resolve the discount issue based on the regional price situation and taking into account the gas prices offered by other suppliers.

Talking about the prospects for the implementation of the Turkish Stream project, Pritchin said that both Russia and Turkey are interested.

The discount issue is not a disagreement, but only a technical point of the discussions, according to the expert.

“Eventually, the political and economic expediency will take on a momentum and the project will be implemented,” said Pritchin. “A formula will be found for the optimal cooperation.”

Both of the players are interested in this issue, said the expert. “I wouldn’t say that only Russia needs this project.”

Russia is the main supplier of natural gas to Turkey. Around 26.7 billion cubic meters of gas was supplied to Turkey from Russia in 2014, and it is planned to increase this figure to 30 billion cubic meters in 2015.

Gas prices are not officially disclosed, but Turkey buys Russian gas at $425 per 1,000 cubic meters, according to Turkish media. Turkey pays $335 for one thousand cubic meters of Azerbaijani gas that is supplied via the South Caucasus Pipeline (Baku-Tbilisi-Erzurum pipeline). The country pays $490 for 1,000 cubic meters of Iranian gas.

It should be noted that Gazprom and BOTAS signed a memorandum of understanding on Dec.1, 2014 on construction of the Turkish Stream gas pipeline for transporting gas from Russia to Turkey through the Black Sea.

The pumping capacity of the pipeline will be 63 billion cubic meters of gas and it is planned to deliver around 50 billion cubic meters of this volume to the new gas hub on Turkish-Greek border.

It is also planned that the first line of the pipeline, with a pumping capacity of 15.75 billion cubic meters of gas per year, will be stretched to Turkey in December 2016.

/By Trend/