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terminating in Turkey’s western Thrace region.
Its first string will supply up to 15.75bn cubic metres of gas per year to Turkish consumers, while its second will run through Bulgaria, Serbia and Hungary, delivering an equal volume of gas to customers in Europe.
Russia’s state-owned gas supplier Gazprom broke ground on the project in May 2017, after hiring Swiss-based Allseas to lay the pipe, and work on both strings’ offshore sections was completed in November last year. It began filling the pipeline with gas in late October.
TurkStream was initially expected to start operations before the end of this year. Its launch will enable Russia to slash gas supplies it sends to Turkey and other European countries via Ukraine. This will strengthen Russia's hand in ongoing talks on establishing terms for gas transit through Ukraine starting next year, after their current contract expires. The two sides have held several rounds of talks, so far without any progress.
Turkey already imports 16 bcm of Russian gas annually through Blue Stream. That pipeline, which also runs under the Black Sea, launched in 2003.
Like elsewhere in Europe, Gazprom is struggling with rising competition and flat demand in the Turkish market. Its supplies to the country slumped 34.5% in January to September to 11.6bcm, on the back of a 8% drop in Turkish demand to 33.3 bcm and increased imports from Azerbaijan and LNG suppliers.
“The economic turmoil in Turkey [has] made consumers there particularly sensitive to the price of gas being supplied, with gas consumption pressured by alternative cheap sources such as coal,” Moscow-based VTB Capital wrote in a recent research note. “Gazprom’s gas is probably the most expensive on the Turkish market, so to keep its market share the company is inevitably going to have to sacrifice the margin.”
Russia exported nearly 200 bcm of gas to Europe in 2019. It has been supplying gas to the Balkans and Turkey through an overland route transiting Ukraine, Moldova, and Romania.
In northern Europe, as part of the plan hugely cut reliance on the Ukraine gas transit route, Russia completed Nord Stream 1 under the Baltic Sea to Germany in 2011. It is expected to launch the $11bn Nord Stream 2 project before the end of the year. Combined, the two pipelines have a capacity of 110 bcm.
The Kremlin in December renegotiated a new gas-transit contract with Kyiv. It guarantees 65 bcm this year and then 40 bcm over the following four years, marking big drops from nearly 90 bcm in 2019.
Greek gas utility DEPA has claimed victory in an arbitration case against Turkish counterpart Botas over gas supplies , drawing a line under a decade-long dispute.
The International Court of Arbitration (ICC) in Paris ruled last week that Botas should retroactively cut the contractual price it has charged DEPA for gas, the Greek firm said in a statement.
“This decision is the final step in a 10-year trade dispute,” DEPA said, without revealing details of the verdict. The company said it was currently assessing the impact of the legal win.
Botas supplies DEPA with around 0.7-0.9bn cubic metres per year of gas it buys from Azerbaijan, under a long-term contract reached in 2003. It opened a
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