Turkey and Russia tie up on energy during PM talks

Russian Prime Minister, Vladimir Putin, says Turkey will allow the construction of the South Stream gas pipeline through its waters by November, dealing a blow to EU plans for a rival project.

Vladimir Putin and his Turkish counterpart Recep Erdogan again affirmed their commitment to understanding each other's energy issues at their Moscow meeting, with the Russian PM ebullient about the readiness state of the South Stream project.

“Work is on-schedule. Environmental testing is 100% complete. Geological and seismic studies are in an active stage and between 85-90 % complete.”

Russian gas currently enters Turkey through the Blue Stream pipeline. Turkish volumes have been down with the economic downturn of 2009, but there is no talk of fines here – unlike Europe – with Turkey seen as a strategic partner, and also the key player in the Samsun – Ceyhan oil pipeline.

Tri-lateral cooperation between Russia, Turkey and Italy in the South Stream gas pipeline and the Samsun Ceyhan oil pipeline might be forged into a common agreement. CERA analyst, Vitaly Ermakov, says this could see Russia gain expedited approval for South stream, which he adds is vital.

“Russia proposed it's alternative, the South Stream project, which is known as Ukrainian bypass. It should be also noted that it bypasses Turkey altogether and in this sense the meetings between Erdogan and Putin in august and now have a lot of hard bargaining.”

Beyond gas and oil, economic cooperation is also deepening with an agreement on construction of an atomic power plant in Turkey. The next top-level meeting between the countries is scheduled for May.