Huge difficulties were predicted for the construction of the Russia-Turkey gas hub

– Will the volumes of Russian fuel that is currently supplied to Turkey be enough to create a new gas hub, or will it require the creation of a new infrastructure?

– The global project to create a new gas hub in Turkey, which provides for the organization of a new trading platform for the sale and purchase of “blue fuel” by European countries, involves a huge range of activities related to both technological and legal aspects.

Now Russian gas to Turkey goes through two Black Sea pipelines: the first of the routes, Blue Stream, was put into operation in the early 2000s. Its capacity is not too large – only 16 billion cubic meters per year.

The second pipeline, Turkish Stream, consists of lines of the corresponding export volumes: one is used to provide fuel exclusively to Turkish consumers, and the second is used to provide residents of southern Europe: Bulgaria, Greece, Macedonia, Romania, Serbia, Hungary, Bosnia and Herzegovina.

All three branches in total involve deliveries in the amount of no more than 50 billion cubic meters. Compared to Nord Stream, each of which has the ability to promptly supply 55 billion cubic meters, such raw material capacities seem quite modest.

– That is, in order to create a hub, first of all, our country will need to build new pipelines to Turkey?

– The expansion of existing branches will be the first step towards the development of a gas hub in Turkey. The capacity of these areas should at least exceed 60 billion cubic meters. Then this hub will acquire the status of a strategic point for the transshipment and purchase of “blue fuel” by the main European consumers.

– How much time will it take to create a really functioning hub, how much can it cost, and who, in fact, will pay?

– The expansion of pipeline capacity will take from several months to several years. The construction of each of the new Russian gas pipelines to Europe – Blue, Turkish, two Nord Streams – took at least five years.

It will also take time (possibly years) to coordinate the launch of gas pipelines into operation. Obviously, in the current geopolitical conditions, the implementation of such a project will require tens of billions of dollars of investment. Who will provide the funds is a huge question.

The creation of domestic Russian infrastructure, apparently, will fall on the shoulders of “Gazprom”. The laying of additional pipeline routes across the Black Sea can be undertaken by a new international consortium, whose participants can be not only Russian and Turkish, but also interested European energy companies.

It is possible that such partners will be given the opportunity to enjoy certain discounts or other preferences for the purchase of fuel. Ankara should pay for the construction of the required infrastructure on Turkish territory, but a number of European consumers, theoretically, can join the investment club.

– With whom, besides Ankara, will Russia have to agree on the organization of a Turkish gas hub – after all, without stable buyers, energy supplies will obviously be unprofitable?

– It is impossible to give a direct answer to this question today. Europe is experiencing a serious shortage of energy resources. However, the head of the European Commission, Ursula von der Leyen, again announced the potential independence of the European gas market from Russian supplies … She is sure that in just 8 months of this year, Europe managed to reduce Russian gas exports by two thirds.

German Foreign Minister Annalena Berbock says the same thing – she generally calls the use of Russian energy resources a “big” mistake. Meanwhile, Germany will pay record amounts for Russian energy this year: the amount for importing our gas could double from 8.8 billion euros in 2021 to 17.6 billion euros. Berlin’s spending on Russian oil threatens to rise from 11.4 billion to 14.3 billion euros.

In addition, another 2 billion euros will have to be paid for Russian coal. So from an economic point of view, participation in the creation of a Turkish hub would be very beneficial for the same German companies. But from the point of view of geopolitics – I don’t know …

– The creation of a gas hub in Turkey also implies the possibility of setting prices for “blue fuel”. That is, a commodity exchange will be created along with the hub?

– Yes. But laying pipes is much more difficult and expensive than determining prices on stock exchanges. Such trade transactions can be carried out in the Internet space. Another thing is that suppliers and consumers must feel absolute trust in the partner – otherwise, the damage to each of the parties will threaten the bankruptcy of cooperating firms. Europe promises to reduce the purchase of energy resources in Russia to a minimum. In this case, our country may not need a new gas hub in Turkey.

– Then filling the domestic fuel market comes first?

– Over the past fifteen years, the level of gasification of domestic regions has increased from 53% to 72%. The population, especially those in private households, willingly connects to modern gas systems, since bills in utility bills in this case fall noticeably.

However, it is necessary to understand that export sales of “blue fuel” provide a significant share of the income of the federal budget of Russia: national payers who buy energy resources at a regulated cost will not provide similar revenue.

The creation of a gas hub in Turkey, where prices will compete with the cost of raw materials on the main world exchanges, will give buyers the opportunity to vary their energy supply costs by reorienting hydrocarbon purchases from the usual stock exchanges to new ones that can not only offer a discount, but also negotiate a stable cost of supplies energy resources for a long period.

Help “MK”: Gazprom’s total exports to Europe, including deliveries via the Turkish Stream, fell to 70-80 million cubic meters per day in September.

Back in September last year, this figure was at the level of 380 million cubic meters daily. According to analytical firm Rystad Energy, at present Russia’s share in EU gas purchases does not exceed 10%.