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30/09/2016

US discourages Greece from Turkish Stream

Europe's East

US discourages Greece from Turkish Stream

Amos Hochstein [State Department]

The United States wants Greece to focus on the Western-backed TAP pipeline project rather than the rival Gazprom-favoured project Turkish Stream, a US special envoy said.

Amos Hochstein, the US Special Envoy for Energy Affairs, told the New York Times on 8 May that his country was backing Greece to build the Trans-Adriatic Pipeline (TAP) that is set to bring gas from Azerbaijan by crossing through Turkey, Greece, Albania and under the Adriatic Sea to Italy.

The TAP project (see background) is a well-advanced project compared to Turkish Stream, the concept of which was launched only last December, when Russian President Vladimir Putin made it clear he was abandoning the idea of South Stream, a Gazprom-favoured gas pipeline project intended to bring Russian gas under the Black Sea to Bulgaria, Serbia, Hungary and Austria.

Instead, Turkish Stream will bring Russian gas to the European territory of Turkey, and then to the Greek border. From there, another Gazprom-financed planned pipeline tentatively called Tesla would move gas further across the territory of Greece to Macedonia, Serbia, Hungary and Austria.

Greece likes the concept of the pipeline, but not its name.

>> Read: Tsipras: ‘Turkish Stream’ will have another name on Greek territory

Gazprom has announced that the laying of pipes under the Black Sea is about to begin and that the first gas via the new pipe will reach Turkey in December 2016. Reportedly, the Italian company Saipem would be put in charge of laying the pipes offshore.

Hochstein, who spoke to the press after meeting with Greek Energy Minister Panagiotis Lafazanis, stressed that while Russia was a major gas supplier for Europe, it was important for Greece and Europe to ensure diverse suppliers.

“Diversification is ultimately the best way to create security of supply,” he said. “And that means that you should be allowed to bring in other sources of gas that are non-Russian, just to have competition.”

That would also reduce the chances of energy being used for political leverage, he said.

The Azeri gas project “fulfills that trifecta of what is energy security: new source, new supply, new route,” Hochstein said. “And it’s not a single country that is dominating the infrastructure and the gas production, it’s many companies, different consortiums, different countries […] no one element can bring it down or use it as leverage,” Hochstein reportedly said.

In another interview, Hochstein was quoted as saying that “Turkish Stream doesn’t exist”. “There is no consortium to build it, there is no agreement to build it. So let’s put that to the side, and wait until there’s some movement on that and see if that’s relevant or not relevant and in the meantime focus on what’s important – the pipeline we already agreed to, that Greece already agreed to,” he was quoted as saying.

The government in Greece however sees both TAP and Turkish Stream as projects benefitting the diversification of energy supply, hoping that those projects will help the country to become a major international gas hub. The government in Athens also believes that the building Tesla would only benefit the economy.

Background

The Trans Adriatic Pipeline (TAP), which will carry Azeri gas to European markets, is seen as Europe's alternative to its reliance on Russia.

The pipeline aims to transport gas from Azerbaijan's Shah Deniz II field in the Caspian Sea, one of the world's largest gas fields, by the end of the decade. TAP is part of the Southern Gas Corridor.

The 870 kilometre (545 mile) pipeline will connect to the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, and cross Greece and Albania, and the Adriatic, before reaching southern Italy.

The present TAP shareholders are BP (20%), Azerbaijan’s state company SOCAR (20%), Norway’s Statoil (20%), Belgium’s Fluxys (19%), Spain’s Enagás (16%) and Swiss-based Axpo (5%).

>> Read: TAP pipeline secures exemption from Third Energy Package

Further Reading