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Russia and Turkey reach agreement on gas discount

Staff writer |
Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan discussed the "Turkish Stream" gas project over the phone.

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Moscow reaffirmed its eagerness to continue work on the new pipeline that would cross from Russia under the Black Sea to Turkey en Route to Europe.

The proposed pipeline would transport 63 billion m3 of natural gas to Europe, effectively supplanting the South Stream pipeline project that was put on hold by Russia in December 2014.

Also, Turkey's state-owned energy company BOTAŞ and Russia's Gazprom agreed that Turkey would be afforded a 10.25 percent discount on natural gas as a result of its participation in the Turkish Stream pipeline project.

Moreover, during the 14th Turkish International Oil and Gas Summit that was held in Ankara, Turkish Energy Minister Taner Yildiz said, "The deal that will provide Turkey with a 10.25 percent discount on Russian natural gas has been reached, and although the agreement has not been signed yet, trust is key in Turkish-Russian relations”.

So far, TANAP has been of the utmost significance to the EU in terms of European energy supply security. According to Daily Sabah, Yildiz stated that the EU and Russia have been in dialogue to resolve the Ukrainian conflict and furthermore, that the European Commission and Turkey will enter into official dialogue to ensure that Turkey will "be able to replace the Western Stream and minimize risks".

Yildiz went on to emphasize that "the Turkish Stream project will not replace TANAP; on the contrary, Turkey owns 30 percent of the shareholding rights to TANAP".

On the other hand, the discount offered to Turkey by Russia will soon be reflected in global market prices. In this way, Turkish customers are unlikely to benefit from the gas discount because of the depreciating value of the Turkish Lira against the US Dollar.

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