Moscow and Ankara agree 10.25% gas discount for Turkey

Turkey's Energy Minister Taner Yildiz (Reuters / Ahmed Saad)
Russia’s Gazprom and Turkish pipeline company Botas have agreed a 10.25 percent discount on Russian gas supplied to Turkey, said Turkish Minister of Energy and Natural Resources Taner Yildiz.

"The documents on the discount haven’t yet been signed, but that's a technical detail. The main thing is that we have agreed, and the signatures are on their way,” said Yildiz Wednesday at a news conference, adding that all the rumors about problems in the negotiations with Russia are groundless.

In February, Yildiz said that after complex and lengthy negotiations Russia had agreed to give Turkey a discount of 10.25 percent on gas supplies. Gazprom had only confirmed reaching an agreement on the price, but not on the size of the discount.

A discount was part of last year's agreement between Moscow and Ankara over the construction of the Turkish Stream pipeline under the Black Sea. Turkish Stream will be laid instead of the South Stream pipeline canceled in December 2014.

Gazprom is interested in starting construction as soon as possible as pipe-laying equipment has been waiting for four months in Varna, Bulgaria, and the company paying for the storage.

However, Gazprom needs to receive permission from Ankara to start construction in Turkish territorial waters. The request was sent in late January, but the permission has not yet been received.

Deputy Head of the European Commission Maros Sefcovic, who is responsible for the creation of the EU energy union, said during his visit to Turkey on Tuesday that a decision on Turkish Stream cannot be taken without consultations with the European Commission.

At the same time Turkish officials are in negotiations about the TANAP pipeline from Azerbaijan the construction of which officially began on Tuesday. The TANAP plan envisages Turkey becoming a key hub through which the gas pipeline will go to South-East Europe from the Caspian region.

In 2014 Gazprom exported 27.4 billion cubic meters of gas to Turkey via the Blue Stream pipeline laid under the Black Sea, as well as via the Trans-Balkan pipeline through Ukraine.

READ MORE: Putin: Russia forced to withdraw from South Stream project due to EU stance

Russia plans to increase gas supplies after Gazprom and Botas signed a memorandum of understanding on the construction of the Turkish Stream. The pipeline will have a capacity of 63 billion cubic meters with 50 billion cubic meters of gas to be supplied through a new hub on the Turkish-Greek border.

The pipeline is expected to supply 15.75 billion cubic meters to Turkish consumers and the delivery is scheduled to begin in December 2016.