Putin offers Europe a new gas deal

The Bell

  • “We could replace Nord Stream’s lost volumes of transit along the Baltic Sea bed via the Black Sea region, thus making the main supply route for our natural gas to Europe via Turkey. We could make Turkey into Europe’s largest gas hub, if our partners are interested in this,” Putin said at Russian Energy Week in Moscow.
  • The EU already gets gas from TurkStream. However, at 14 billion cubic meters a year, TurkStream has only half the volume of any of the Nord Stream lines. There is also Blue Stream, with a further 16 billion cubic meters, but that is almost entirely used to supply Turkey.
  • At the same forum, Gazprom head Alexei Miller said his company was ready to increase capacity and build a new gas hub on the border between Turkey and the EU. Turkey’s Energy Minister said that it was the first he had heard of the idea, but admitted that “taking into account the existing cooperation between our countries,” laying new pipelines was possible. On Thursday, Putin discussed a gas hub with his Turkish counterpart Recep Erdogan.
  • The proposed TurkStream 2 is an ideological replacement for Nord Stream 2. While it is not as direct, it offers access to the same European market via a “friendly” nation. However, it may face the same fate because the EU has a principled opposition to buying Russian gas. “Regardless of any sabotage on gas pipelines, Russia has shown itself to be an unreliable energy partner,” German government spokeswoman Christiane Hoffmann said last week. The EU has already reduced its reliance on Russian gas from 40% of total imports to under 10%.

Why the world should care

Putin is making every effort to preserve Gazprom’s place in the lucrative European market, and wants to persuade the EU to negotiate with Russia and lift some sanctions. He again highlighted last week that Europe’s switch to spot prices for gas had already cost the continent €300 billion ($292 billion). Gazprom chief Alexei Miller added that it would take more than a year to repair and relaunch the Nord Stream pipelines. Intense cold in Europe this winter could end up freezing “entire cities, entire lands,” Miller claimed.

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