By Lyubov Pronina and Ali Berat Meric
Aug. 6 (Bloomberg) -- Turkey may offer its territorial waters for OAO Gazprom and Eni SpA’s proposed South Stream natural-gas pipeline at a signing ceremony in Ankara today.
Russian Prime Minister Vladimir Putin and his Turkish counterpart Recep Tayyip Erdogan are likely to agree to an environmental study for the pipeline that’s seen as a competitor to the European Union-backed Nabucco link into central Europe. Italian Prime Minister Silvio Berlusconi will join the ceremony, his office said today.
Turkish officials may offer sea territory when they sign 16 documents with Russia during Putin’s one-day visit to the Turkish capital, including protocols on gas, oil and nuclear power, Yury Ushakov, Putin’s deputy chief of staff, told reporters in Moscow yesterday.
Russia’s state-run gas exporter Gazprom is looking to the South Stream pipeline, a 900-kilometer (560-mile) link under the Black Sea from Russia to Bulgaria, to help diversify supplies to Europe that were disrupted in pricing disputes with Ukraine, while retaining control over exports to the continent. The pipeline, with annual capacity of 63 billion cubic meters, will open on Dec. 31, 2015, and cost 8.6 billion euros ($11.6 billion) for both the subsea and overland segments, Gazprom Chief Executive Officer Alexei Miller said in May.
Expanding the capacity of another Russian gas pipeline link crossing the Black Sea to Turkey, Blue Stream, may also be discussed today, Ushakov said. Blue Stream’s current design capacity is 16 billion cubic meters a year.
Nabucco Competitor
The competing Nabucco pipeline plans to bring gas from the Caspian region into Austria via Turkey, avoiding Russian territory. Russia is the world’s biggest gas producer and supplies Europe with about a quarter of its gas needs.
The 7.9 billion-euro Nabucco project is meant to prevent a repeat of the hiatus in gas deliveries that cut supplies to European consumers twice since 2006.
Officials from Turkey, Bulgaria, Romania, Hungary and Austria signed an accord in the Turkish capital Ankara on July 13 for the OMV AG-led Nabucco project, which has been in planning since at least 2004. Nabucco is due to send as much as 31 billion cubic meters of Caspian Sea-region gas a year via Turkey to Austria, starting in 2014.
Russia and Turkey may also agree to extend gas contracts. Turkey is the third-largest customer for Russian gas after Germany and Italy. Russian deliveries account for 64 percent of Turkey’s consumption of the fuel. The country delivered 24.5 billion cubic meters of gas to Turkey last year, including 10.5 billion cubic meters through Blue Stream, Gazprom data show. Turkey received 9.6 billion of cubic meters of gas from Russia in the first half of this year.
The officials also plan to sign an accord on setting up a working group on a proposed oil pipeline from Samsun to Ceyhan. Gazprom said in July last year that the company’s crude oil arm would be interested in joining a pipeline project planned by Italy’s Eni and Turkey’s Calik Holding AS.
To contact the reporters on this story: Lyubov Pronina in Ankara via Moscow office at lpronina@bloomberg.netAli Berat Meric in Ankara at americ@bloomberg.net
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