Visa Regime for “South Stream”

By Tatjana Stanovskaya

The negotiations between the President of Russia Dmitry Medvedev and the Prime Minister of Turkey Recep Erdogan took place in Moscow, the most important result of which was the abolishment of visa regime. However the main subject covered energy relations: the Kremlin specified clearly, that it is ready to refuse of the “South Stream” piping, if Turkey won’t give the permission on it in favor of the condensed natural gas production plant. It’s hardly worth to take the kind of intentions seriously: Moscow has already used the kind of pressure tactics in order to force the partner-state to choose more flexible line.

The core of the problem is that Turkey prolongs the issuing of permission for the piping within its economic waters of the Black Sea. At the same time Istanbul asks Moscow to freeze the price on Russian gas supplies. There is a severe bargain led and the both Parties are searching for the ways to promote their own lines. The Vice Prime Minister Igor Sechin reported yesterday to the “Rossijskaya Gazeta” (Russian Newspaper) that “unilateral reduction of prices is called freebee”.

> South Stream On The Map Of Europe
Specifications of the South Stream Project
Evidently, prices freezing, which will not become a freebee, is possible if Russia gains the permission to pipe the “South Stream”. This is the main political objective and obviously there is no move forward. As the Vice Prime Minister noted the issue of gaining Turkey’s permission was raised during the talks in the Kremlin, but still it remained unsolved. “Turkish partners say that “Gazprom” hasn’t presented economic proves for the project accomplishment, which it can’t present, as it has received the permission to hold survey procedures only starting from May 31st”, - Sechin expressed his astonishment.

Now the Kremlin has chosen a new tactics, having threatened to refuse of the “South Stream” at all, which would deprive Turkey of transit profits. As Igor Sechin stated for “Kommersant”, “at the moment “Gazprom” and the Government study various variants of expenses minimization within the South Stream project accomplishment. The option to construct the condensed gas plant in the Black Sea can become an addition or one of the alternatives for the pipeline variant,— he claimed for the newspaper.— By this the сondensed natural gas production plant can be constructed in north Russia for Yamal gas”. This view was supported by the Press-Secretary of the Prime Minister Dmitry Peskov. “Condensed natural gas production plant is a harmonious part of the South Stream project. But if we face invincible obstacles within the project accomplishment, this part can transform into a complete alternative of the pipeline variant”,— he specified for the “Kommersant”.

The “Kommersant’s” source declared directly, that Russia was forced to search for alternative options due to the hard line of Turkey, which hasn’t yet given the permission for the piping within its exclusive economic area. But in exchange for the promise to give such permission Moscow has agreed to construct the oil pipeline Samsun - Ceyhan to the detriment of its own project of Burgas–Alexandroupoli pipeline. It was expected that the permission would have been issued yet by December 10th of previous year. Instead, in February “Gazprom” received the permission to hold “geological and seismic studies”. Final permission can be gained by November 1st. Obviously, Moscow feels itself simply as being cheated.

The threat of the “South Stream” refusal on this background looks like pure bluff: the project is too politically important for Moscow. Its main objective is to reduce dependence from Ukraine as a transit state. And “Gazprom” representatives have repeatedly commented on it: despite the election of a pragmatic President Viktor Yanukovych, the Kremlin prefers to get secured from political risks in prospect. And all affirmations of Kiev, that the country is able to assure uninterrupted transit, are perceived today with a big share of scepsis. Moscow hasn’t even refused of the idea to establish a gas transporting consortium, which it had struggled for over several years before and after the “color revolution” in Ukraine. There is a new idea in the agenda – the consolidation of “Gazprom” and “Naftogaz Ukrainy”, in the essence, the take-over of the last one. Probably only in this fantastic (as it seems now) case Moscow can think consider the option to refuse of the “South Stream”. But Turkey will obviously have nothing to do with it.

Translated by EuroDialogueXXI from