2018-10-02

Gazprom leaves Turkey for the sake of TurkStream and Akkuyu

By Maxim But

The sale of shares of the Turkish Bosphorus Gaz by Gazprom was a predictable step, decision has been going on the agenda for the last several years. The leading expert of the National Energy Security Fund, a lecturer of the Financial University of the Russian Federation Government, Stanislav Mitrokhovich, reveals details.

"For many years Gazprom Company has been present on the domestic market of Turkey, earning gas for end consumers by selling gas - as is known, this is a much more marginal type of business than wholesale trade, which it conducted through the presence in Turkish companies-traders, for which it bought up weighty shares in these companies, but Ankara did not like it, because of this Turkish government did everything to squeeze the Russian company from the domestic market.

Turkish leadership cleared the place for its own business, limiting the incomes of the Russian partner by introducing tariff regulation - not the most friendly action on the part of Ankara. And the fact that Gazprom intends to leave the Turkish gas market was clear for a couple of years ago - immediately after the warming of relations between the two countries against the background of the Russian plane shot down by the Turkish military. That is, it is part of the agreements between Moscow and Ankara," the analyst said.

"Gazprom" announced the completion of sale of its Turkish asset Bosphorus Gaz. The Russian holding acquired 71% of this company in 2009, but in September 2018 Bosphorus Gaz was excluded from the list of affiliated legal entities with the Russian company. A few weeks ago, Gazprom's deputy chairman of the board, Alexander Medvedev, said that the events on the Turkish market are complex, including in connection with the economic situation. This he announced the sale of a stake in Bosphorus Gaz.

"There is nothing critical in the sale of shares of the Turkish company by Gazprom - most likely, the Russian holding will leave the domestic market of this country in the near future." Turkey left profitable retail sales of resources to its businessmen, Gazprom received wholesale trade - on interstate contracts.As part of the general energy relations between Turkey and Russia, this will eventually become a positive factor.

Now Moscow and Ankara realize two large energy projects at once: two threads of the Turkish Stream gas pipeline and the Akkuyu nuclear power plant are in progress. The departure of Gazprom from the domestic market of Turkey is part of the agreements that allowed the establishment of comfortable and mutually beneficial relations between Moscow and Ankara, providing support for major projects. Although the Turkish side is trying to get a price - if it built its ground part of the gas pipeline on time, the gas from the first thread would already have been pumped from Russia to Turkey bypassing Ukraine, "the expert points out.

Previously, Gazprom had already sold its assets to the trader Akfel Holding, nationalized at the end of 2016. Considering the sale of Bosphorus Gaz, the Russian holding already this year can completely leave the Turkish market. The official representative of Gazprom, Sergei Kupriyanov, said earlier that the holding would adapt a specific model of work in the Turkish gas market for a long-term perspective under the changing conjuncture of the country's energy market. The buyer of the share of Gazprom was the local Sen Group, which now owns the remaining 29% in Bosphorus.

In Turkey, Russian gas is supplied to the state-owned oil and gas company Botas and private companies, which, under the decision of the country's leadership, are granted the right to import fuel from Russia. Within the contracts concluded in 2013 with Gazprom, they receive about 10 billion cubic meters of gas a year and sell it on the domestic market.

"It is not profitable for Turkey to seek an alternative to Russian gas - Ankara will not find such an advantageous environment anywhere else." On the other hand, Moscow does not need the Middle East partner to follow principles and actively work on other directions of deliveries, while the Russian and Turkish sides are interested in implementation of large energy projects.

Therefore, in 2016 bilateral agreements were concluded, beneficial to both parties, and Gazprom's departure from the domestic Turkish market became a part of them. In the long term, the Turkish Stream is a much more important project, and Ankara guarantees that the project will be implemented. Sticks in the wheel "Akkuyu", too, no one will put.

Interstate relations between Russia and Turkey are rather complicated. They include not only energy projects, but also many other economic spheres. In particular, the return of Turkish goods to the Russian market, the return of our tourists to the resorts of the Middle Eastern partner, the permission of the Turks to work in Russia. Both Ankara and Moscow pursue their own goals in the development of relations, therefore each time to achieve the goal it is necessary to make compromises , this is normal in international diplomacy," concludes Stanislav Mitrokhovich.

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