The idea of creating a gas hub in Turkey is still on the table and yet if it’s established, it would be an electronic trading platform rather than a physical facility to store large volumes of Russian gas, according to President Vladimir Putin.
(Bloomberg) — The idea of creating a gas hub in Turkey is still on the table and yet if it’s established, it would be an electronic trading platform rather than a physical facility to store large volumes of Russian gas, according to President Vladimir Putin.
The Kremlin came up with the plan to establish a major gas-trading hub in Turkey last October after its energy relations with the West reached its lowest point in decades following Russia’s invasion of Ukraine. Back then, Putin talked about potentially building additional Black Sea links toward Turkey to make this route Russia’s main westbound gas-export facility.
The idea was actively discussed in the months after, with Turkey nurturing the ambition to become the regional gas trade center with its own price index. Yet its implementation, which according to Putin’s initial estimations could take just months, seems to have stalled recently.
“It’s still on the agenda,” Putin said late Saturday at a briefing in St. Petersburg, Russia. “It’s about creating an electronic trading platform, we are not going to store massive volumes of gas there,” he said. Putin didn’t specify if that approach would mean a lower scale of Russian gas trading at the hub than initially envisioned.
Leaders of the two nations have agreed to have a phone call on Wednesday to discuss a range of issues, according to Putin. There is no decision yet on whether he may meet Turkey’s Recep Tayyip Erdogan personally anytime soon, and where, Putin said.
READ: Where Did All That Russian Gas Go?
Russia ships gas to Turkey across the Black Sea through two pipelines — the Blue Stream and the Turkstream – with a combined capacity of just under 48 billion cubic meters per year. One leg of the twin Turkstream link serves the Turkish market while the other links up to the gas pipeline network of nations in southern Europe, making Turkey a key transit country for Russian gas.
Since capacity of the Black Sea links are underutilized, they could carry an extra 10 billion cubic meters per year of Russian gas to Europe as soon as 2025 if the gas hub in Turkey materializes, according to estimates by Sinara.
Sinara forecasts Russia’s total westbound pipeline-gas deliveries at some 51 billion cubic meters this year, including 24 billion cubic meters to Turkey across the Black Sea and around 15 billion cubic meters to Europe through Ukraine.
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