‘Turkey will allow South Stream pipeline by end of year’

By Faruk Akkan, Fuat Seferov

Gazprom Deputy Chairman Alexander Medvedev has said Turkey will give the OK for the South Stream pipeline project, which will transport Russian natural gas to Europe by passing through Turkish territorial waters, by the end of the year.

Speaking to reporters in Moscow on Tuesday, Medvedev said extensive studies in the Black Sea have already started and that transportation of natural gas is planned to begin in 2015, but Turkey's refusal to allow construction in its territorial waters has slowed the project.

Medvedev says ongoing negotiations with Turkey suggest that permission for construction will most likely be given by the end of the year. He added, “Turkey has not made additional demands.”

Russia was expecting that permission for construction of the pipeline would be given by the end of October 2010, but demands from Turkey for seismic reports on the pipeline route have delayed the project. Turkey's delay could be a policy used by the government to obtain extra time for the Nabucco pipeline project, which is seen as a rival to South Stream and is strongly backed by the European Union and the United States.
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Specifications of the South Stream Project

The South Stream pipeline project was signed by Russian company Gazprom and Italian company Eni in 2007, and the two giant established a joint company for the project in 2008. Bulgaria, Serbia, Hungary and Greece also signed on to participate in the project. Bulgaria recently announced that it has scrapped the Trans-Balkan Pipeline, another deal that would expand Russian sales by carrying Russian oil to Greece, for financial reasons.

After he took office in July 2009, Bulgarian Prime Minister Boiko Borisov's center-right government said it would reconsider the country's participation in large-scale energy projects with dominant Russian participation in an attempt to reduce Bulgaria's almost total dependence on Russian energy sources. Bulgaria might also withdraw from the South Stream pipeline project because of financial problems.

Bulgaria is also part of the Nabucco pipeline project, which aims to bring Azeri, Turkmen, Iraqi and possibly Egyptian gas to Europe via Turkey, Bulgaria, Romania, Hungary and Austria. Supporters of the Nabucco pipeline have strong doubts on the feasibility of the South Stream pipeline, which would cost twice as much as Nabucco.

Heinz Hilbrecht, former director at the European Commission Department of Security of Supply and Energy Markets, recently remarked that the Southern Gas Corridor project, which also includes the Nabucco pipeline project, would be highly profitable and more feasible than the South Stream project. He also noted that Nabucco will serve the mutual interests of Turkey and the EU by improving their cooperation on energy issues.
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