ATHENS - The new Greek government’s improved relations with Russia may help the implementation of Gazprom’s planned Turkish Stream pipeline to Europe.
On February 5, as debt negotiations between Greek Finance Minister Yanis Varoufakis and his German counterpart Wolfgang Schauble in Berlin showed no compromise, Russian President Vladimir Putin invited newly elected Greek Prime Minister Alexis Tsipras to visit Moscow on May 9 for the WWII Victory Day celebrations. The two leaders discussed expanding ties between their countries in a phone call on February 5.
Talks between Greece’s anti-austerity premier and the Kremlin leader reportedly partly focused on possible routes to send Russian natural gas through Greece into the rest of the EU.
In an effort to bypass Ukraine, Gazprom wants to build a new pipeline route through Turkey that would carry Russian gas to Europe. Moscow and Ankara have started the technical work on Turkish Stream, Turkey’s ambassador to Russia Umit Yardim said on February 3. The gas could then potentially be pumped through Greece.
“Russia no longer considers South Stream seriously after the relative hostile reaction from the European authorities, which didn’t make any attempts to open the door for Russian gas from that perspective, and now we’re realising that Turkey and Greece are becoming the new partners of Russia in terms of gas transit, Alexander Kornilov, a senior oil and gas analyst at Moscow’s Alfa Bank, told New Europe.
“The situation in Ukraine is very unpredictable and from that prospective the willingness of Gazprom to avoid any risks associated with Ukraine as a transiting country is very clear and understandable,” Kornilov said.
He noted that the fact that Gazprom is going to spend its own cash without any partners for the undersea part of the pipeline is a good indication that Gazprom is really in a rush to implement this project. “At the same time they need to deal with Turkey, with Botas, regarding the equity stakes and the onshore section of the pipeline. However, it’s not quite clear who is going to buy the gas,” he said.
Russia is currently in negotiations with Turkey to deliver 63 billion cubic metres of gas annually there. There are also talks about building a regional distribution hub near the Greek-Turkish border to supply the rest of Europe. “From that perspective Europe needs to run its own infrastructure and so far we have seen only the relatively warm reaction from Hungary,” Kornilov said.
Relations between Athens and Moscow are improving. Just days after being elected prime minister, Tsipras said he didn’t support expanding EU sanctions on Russia even though at the end Greece stepped back into line with Brussels policy. Kornilov said good Russian-Greek ties could help Turkish Stream. “But so far we shouldn’t really forget the fact that basically the key role of that pipeline is not Greece but rather the central parts of Europe where most of the gas consumption is concentrated. Therefore, the agreement of Greece and the friendship with Greece is not enough to make that project happen. Russia needs to continue negotiating with other countries - potential buyers of Russia gas. Basically those countries which are located along the ex-South Stream route,” Kornilov said.
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Previously on Energy Insider:
Oil Slump, Weak Ruble, Ukraine, Make Gazprom Reassess Plans