Pipeline Politics: Russia, Turkey Clash Over Energy As Syria Rift Shifts Focus To German Line

Tyler Durden's picture

In June, we noted that Russia had signed an MOU with Shell, E.On and OMV to double the capacity of the Nord Stream pipeline, the shortest route from Russian gas fields to Europe.  

Here is a helpful visual:

What you’ll note from the above is that the Nord Stream allows Gazprom to dodge Ukraine, which is desirable for obvious reasons. 

Of course that’s not good for the Eastern European countries (like Ukraine) who derive revenue from the flow of gas. Late last month, Slovak PM Robert Fico had the following to say about the Nord Stream project: 

“They are making idiots of us. You can’t talk for months about how to stabilize the situation and then take a decision that puts Ukraine and Slovakia into an unenviable situation.”

To which we said the following:

When it comes to making grand public declarations about “stabilizing” unstable geopolitical situations and then turning around and doing something completely destabilizing, the West (and especially the US) are without equal, as evidenced by all manner of historical precedent including Washington’s efforts to help sack Viktor Yanukovych whose ouster precipitated the conflict in Ukraine in the first place. And make no mistake, to the extent there’s energy and money involved, that’s all the more true which is why it isn’t at all surprising that Western Europe would facilitate a deal that lets Gazprom bypass a war zone if it means getting natural gas to countries that “matter” in a more efficient way.

In an interesting, if predictable twist, Western Europe may need to step up its cooperation with Gazprom even further going forward because now, the conflict in Syria has strained the energy relationship between Moscow and Ankara. Specifically, several purported Russian violations of Turkey’s airspace have made President Erdogan "irate" and more generally, The Kremlin’s support for the Assad regime has angered Turkey, which has long supported and worked to facilitate his ouster. Here’s a bit of color from FT:

Last year, Recep Tayyip Erdogan, then Turkey’s prime minister, was one of the only western statesmen to attend the opening ceremony of the 2014 Winter Olympics in Sochi. On the sidelines he met President Vladimir Putin and hailed the strong ties that bound Russia and Turkey.

 

Such warmth seems a distant memory today.

 

The two men are at loggerheads over Syria, and their spat threatens an important energy relationship: Turkey is the second-largest consumer of Russian natural gas. A new pipeline across the Black Sea was supposed to cement the partnership. Its future is now murky.

 

Last week, an irate Mr Erdogan, now Turkey’s president and still the country’s unquestioned leader, warned that, because of its military intervention in Syria, Russia risked forfeiting a $20bn contract to build a nuclear power plant on Turkey’s Mediterranean coast. Ankara could also source its gas from elsewhere, he warned.

But that's where things get tricky because as Bloomberg noted on Monday, "Russian gas keeps the lights on in Turkey":

Nearly 75 percent of Turkey's energy use is derived from outside sources, with Russia alone accounting for one-fifth of Turkey's energy consumption, more than any other. Russia's Rosatom is scheduled to start building Turkey's first nuclear plant next year and the two countries are also partners on a major new natural gas pipeline, known as TurkStream, which will eventually allow Russia to send its natural gas into the heart of Europe via the Turkish-Greek border rather than through embattled Ukraine. Gazprom, the world's largest natural gas producer and a TurkStream signatory, recently announced that the project would be delayed and capacity cut. Turkey represents Gazprom's second largest market after Germany. 

Read the last bolded passage there and then, referring back to the map shown above, follow the Nord Stream right into ... Germany. Once again, here's Bloomberg:

Putin feels able to change tack on Turkey, the second-largest customer for Russian gas, because in September he agreed to expand the Nord Stream pipeline that links Russia directly with Germany.

 

“Putin is betting on Nord Stream, but that bet is risky," Sijbren de Jong, energy security analyst at the Hague Centre for Strategic Studies, said by e-mail. "Can Gazprom really afford to annoy Turkey and forgo gas revenues? Hardly."

 

Europe receives about a third of its gas from Russia with a third of that volume flowing through Ukrainian pipelines. Gazprom aims to end or at least cut its gas transit through the former Soviet republic after the current transit contract expires in 2019.

 

Putin said last year that the new Turkey route would help Russia to meet this goal. After talks on the link stalled over the summer, Gazprom said that the Baltic Sea link directly to Germany known as Nord Stream-2 was a priority.

 

Putin’s bet on Nord Stream-2 is risky as the project may face opposition in the EU, De Jong said. EU Energy Commissioner Miguel Arias Canete said last week the link risked concentrating 80 percent of the bloc’s Russian gas imports on one route while eastern European nations have also warned of the risk of circumventing Ukraine.

 

Gazprom said Tuesday that key markets for Nord Stream-2 are boosting gas purchases from Russia, with total European exports in early October gaining almost 36 percent from last year’s level.

There are two takeaways here. First, all of this underscores the degree to which geopolitics and energy are inextricably bound up and that serves to strengthen the thesis that part of what triggered the conflict in Syria were energy disputes between the two regional axes of power. Although Moscow and Ankara have thus far kept it civil in order to preserve and expand trade, it now looks as though each country may be willing to Plaxico themselves all because they disagree over what the fate of Bashar al-Assad should be.

Second, Turkey needs to be careful here. If Erdogan effectively kills the Turkish Stream because Russia is bombing anti-regime forces in Syria, then Ankara had better hope Moscow and Tehran don't succeed in restoring Assad, because then, there'd be no hope for the Qatar line either. 

And as for Erdogan's contention that because Turkey can get gas from sources other than Russia, Moscow should "think well," the following pie chart suggests that in the current geopolitcal environment, it is actually Ankara that should think twice before adopting too brazen a position...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
LawsofPhysics's picture

The spice must flow...

eurogold's picture

Germany should stop with the pretenses and align with Russia ASAP

Latina Lover's picture

Putin understands that Erdogan is an untrustworthy partner, who would sell out ANYONE for any reason.Turkish Stream was a good compromise in retrospect, since it is now obvious that Russian and Iranian support for Syria will keep Assad in power.

Nordstream 2 will be opposed by the EU USSA controlled puppet regime, but Germany will do what is good for Germany and make the deal happen. Not only will Germany earn billions more in transit fees, but she will also become a major gas distribution hub.  Let the Ukies, Polacks and Slovaks squeal like stuck pigs; billions means more to Germany than third world countries that cannot vote in german elections.

As for Turkey diversifying away Russian gas, I predict the military and commercial interests will destroy Erdogan first. There are no other economic suppliers since Quatari piped gas is now only a neocon fantasy.  Even if Syria is at war for the next 10 years, there will be no new pipeline unless it is possibly Iranian.

Putin really check mated the USSA, Saudi Arabia, Quatari and Israel.

eurogold's picture

So true ! The Turks are such "batshit" fuck-Ups on every scale!

Germany is in the process of recognising with whom they should be alligned with for the future.

cheka's picture

jeez...please stop it with the 'because pipeline'

they are not a scarce natural resource.  they are easily installed and maintained.

one of the family of 'because' lies to dupe the m-asses

Joe Trader's picture

The pipeline map's missing the LNG port that opened this week in Poland - it will be supplied by Qatar - with the capability to supply Lithuania, Latvia, and Estonia in the Baltics; and in the south it could supply Czech Republik, Slovakia, Hungary, & Ukraine.

Russia lost 1/3 of it's eastern European customer base with Poland becoming independent of Russian natgas (as of 2017)

BarkingCat's picture

Why not? They have a centuries old history of wonderful relationships with their neighbors. 

Linoleum Blownapart's picture

Why? Turks are some of the sweetest people I've met. Even the policemen are funny and feed you expensive pastries, even in the big city. They also talk about the "bad/mean American police."

If Turkey is to be treacherous, I think it's because of TPTB, not because of Turkish culture. Just my 2p.

the phantom's picture

Well, there is your experience, and then there's, you know, history.

smacker's picture

Indeed. As I recall many of the people who migrated to our old friend Khazar and became Ashkenazi jews originated from northern Turkey.

Vylahkinnen's picture

Yes, that would be great. But it is too late. It is a shame that such great countries like Russia and Germany can no longer form an alliance.

eurogold's picture

Germany is  now in the process of turning it's back towards the U.S..... Thanks to the the way the U.S. has lied.

Thats why the U.S.A. had to penalise  Germany with the VW Diesel issue as other manufacturers have been doing the same thing. Keep it up U.S. and Europe will go to Russia !

daveO's picture

Thank you. Guess what they've cooked up now. A propaganda movie against the biggest car maker.

http://www.dailymail.co.uk/tvshowbiz/article-3270003/Leonardo-DiCaprio-b...

eurogold's picture

Thanks for the link. Just so everyone knows.... did VW fuck up ? Of course they did.

But why is this issue such a big deal now ?

Because the U.S knows that it is losing Germany ...and had to retaliate in some way ?

Volkodav's picture

That confirms even more what has been apparent.

Germany independent productivity is targeted again.

eurogold's picture

I live in Germany and if I were in the market, the only car I would buy would be a VW diesel, especially now !

daveO's picture

Blocked from editing this comment. The goal is to poison the brand for potential VW buyers. Here's another article.

http://money.cnn.com/2015/10/13/media/volkswagen-scandal-movie-leonardo-...

This just proves, to me, who took down the German Wings jet in March.

 

eurogold's picture

Dave O , not sure about the germanwings thing. Co-Pilot had personal issues.

Regarding the U.S. aggrivation with Europe not "towing the U.S. line".....

The signs are there for those who are interested.

conscious being's picture

eurogold - consider that the US  agencies love a pilot with personal issues, like they love a shooter with personal issues, like they love a Russian airport snowplow driver with personal issues. They know what to do.

BarkingCat's picture

Germany is in the process of committing suicide. Their relationship with anyone is irrelevant.

smacker's picture

But hasn't Mutti made it more difficult since she fully supported sanctions against Russia and has said a lot of bad things...

HoserF16's picture

Germany want's to align with Russia. Why do you think the US Guberment fucked with Volks Wagon and is trying to fine them 18 Billion Dollars? To send a message to the German government. Don't get kozy with Putin...

kralizec's picture

Take Turks, Roos and Persians, add some EU stank, sprinkle in oil and gas, add a dash of geo-political gamesmanship and similar/competing/differing views on a range of issues depending on the wind direction and you have a swell recipe for a wicked brew.  Just sit back and watch the show.

 

Zero-Hegemon's picture

Where are all the emporers when you need them? With the exceptions of Iran and China it looks like all the former imperial countries are coming together again to party down.

KnuckleDragger-X's picture

War is fought in many ways and in the modern world energy is a biggie. I just wonder if anybody has tried to explain this to President Zippy.....

adeptish's picture

Erdogan will be gone after the next election.

gcjohns1971's picture

See the planned pipeline represented by a dash-dotted line in the lower right?

It is the Baku-Sokhumi gas pipeline, constructed as the partner to the Baku-Tblisi- Ceyhan pipeline.

It COINCIDENTALLY was scheduled to go online in 2008, and to terminate in the Georgian city of Sokhumi, with pumping stations there to pump the gas under the Black Sea to Ukraine, from where it was to enter the European market.

Sokhumi is TOTALLY COINCIDENTALLY located in Abkhazia, the area of Georgia occupied by Russia over ethnic concerns.

What a coincidence!!!

 

Max Steel's picture

you got it all backwards? Georgian US backed stooge waged war against Russia by shooting down Russian peacekeepers in those 2 areas of S.ossetia and Abkhazia. So you're saying US helped Russia to ulitmately take those regions out of Georgia? Hysterical.

Bankster Kibble's picture

Both right?  Could be that was why we were so furious when the Georgians lost that little war back in 2008.  That plus they couldn't get entrance to NATO.

Max Steel's picture

you're fed distorted lies and spinoffs thats why.

Wild E Coyote's picture

Gcjohns is right.
That pipeline should have been on line.
But as usual US would not have Russia becoming closer to Europe bypassing needs of US. Or have people of Abkhazia get control over pipeline running through their territory.
So, another round of puppet show.
The President of Georgia cooks up reason to fight Rebels in Abkhazia which was at the time under peacekeeping force of Russia.
No. Nothing is coincidence.

Joe A's picture

The rebirth of Southstream is at hand.

HenryHall's picture

Maybe Romania would like to do a SouthStream rebirth deal.

Romania and Russia get to divide Moldova between them.  I mean the various parts of Moldova get to vote on whether their locality is to be part of Romania or part of Russia (which amounts to the same thing).

jtg's picture

Turkey had better get rid of Erdogan. He is taking Turkey straight toward disaster.

conscious being's picture

Back in the 19th century, the European powers were petrified that Russia would take control of Constantinople.

Neochrome's picture

Unlike US, Russia's guiding principle is not oil/gas industry welfare. Bulgaria can cry over South Stream, Turkey over Turkish stream and so on, it turns out in case of Russia it's not a gas (oil) company that wags the country. I don't see Germans complaining over the Nord Stream pipeline or (further) sabotaging their economy trying to score some brownie points with US. Well, good for them.

bid the soldiers shoot's picture

Russia cancelled plans for the South Stream pipe after Bulgaria told Moscow that the EU insisted that Sofia drop its plans of partnering with Gazprom because of anti-monopoly bullshit.

jusman's picture

...and poor Greece, hoping to make a little money off the pipeline, gets it "Greek style" again!!!

 

kaboomnomic's picture

EDITED: Forgot to give 1st link. Sorry.

Bwahahahahaha.. Oh western MSM. You're so funny!!

Oh OK. Now read this,
https://www.rt.com/business/311447-russia-turkey-pipeline-talks/

That is the reason why that turkish pipeline halted. Would you do a bilateral deals, when there are no ministries of the other side??

Second, look at this link,
http://www.hurriyetdailynews.com/turkey-urges-russia-not-to-escalate-ten...

Quote:
“I just spoke with our chief of General Staff. We have given necessary instructions to our foreign minister. Diplomatic traffic has begun. Our position is very clear, we’ll warn any country that violates our borders in a friendly way. Russia is our friend and neighbor. There is no tension between Turkey and Russia in this sense. The issue of Syria is not a Turkish-Russian crisis,” he said

Is that sounds like a languange of hatred to you?? Directed at Russia?

Next, read this.
https://www.rt.com/business/318354-russia-turkey-gas-erdogan/

Btw that data came from EIA. You can check it to EIA site.

Now the question would be, WHERE turkey can get 75% import subtitutions??

Easier said than done, eh??

- - -

It's so funny how clueless western msm really are.

Bwahahahahahahahahaha...

Moribundus's picture

Russian jets fly into territory anexed by Turkey

https://en.wikipedia.org/wiki/Hatay_Province

honestann's picture

That "annexed" territory is clearly not part of the fictitious nation of Turkey.  Just because some moron says "that is mine" doesn't make it so (with any property, especially land).

This relates to the bogus nonsense going on with China too.  For a change, this time China is in the wrong.  When you permanently attach an oil rig to the bottom of the ocean, that does not create a "new island territory" in international waters... it remains (essentially) a "fixed vessel" in those international waters.  The rig is owned, but the region around it remains international waters.

The same applies to dumping tons of sand on a reef in international waters.  You may create a fixed blob within international waters, but you don't create a new "island belonging to China", and you certainly don't obtain exclusive access to everything (including passage) within 15 miles.

Human adults.  What children!  Sheesh.

honestann's picture

SELF-SUFFICIENCY.

-----

Hey, I totally understand and appreciate the concept "division of labor".  Seriously, I really do.  However, the longer I live, the more I appreciate the other side of the coin, namely self-sufficiency.

That's not only because I spent my life savings to become self-sufficient either.  During my "career" as scientist, engineer and product-developer, the more self-sufficient I became, the more efficient, effective I became, and the smoother my working life became.

-----

Of course, self-sufficiency and the polar opposite (extreme specialization == outsource everything except one part or process) need not be a digital decision.

Some relevant observations are:

#1:  Division of labor works best when specialists-suppliers are nearby.

#2:  Self-sufficiency is most important, valuable and prudent when dealing with highly crucial parts, materials and processes... meaning "stuff it is difficult to live without".

When it comes to something of nearly universal importance like energy, self-sufficiency is extremely important, valuable and prudent.  Thus every nation (if not state, county, province, town, family, individual) should become as energy self-sufficient as feasible.  The same goes for water, food, shelter and clothing.

-----

As an aside... I think it is just insane for fictitious nations to play politics with commerce.  That's an insane policy.  Of course, the USSA is worse than anyone in this regard (note recent abuses of the SWIFT system for example).

lolmao500's picture

Erdogan is a dumbfuck. If he was bright, he would tell the EU and NATO to go fuck themselves, ally himself with Iran, Syria, Russia and CHina and kick the jihadists asses...

onmail1's picture

CrashOpetrodollar == WW3

 

Miketheterrible's picture

Turkstream is still apparently ongoing but Gazprom cut it down from 4 pipelines to 2 pipelines cause that is apparently what the two sides agreed with.  Erdogan is playing a dangerous game but he wont last forever.  Add to that, Nordstream 2 is still ongoing as another European company signed an agreement for 2B Euro's in partaking in it.

With all it is said about supposed Russian aggression in Turkey (2 Su-30SM's went in and out in a matter of a minute or so), Turkey had gone into Syrian territory, Greek Territory and Armenian territory since then.  The supposed MiG-29's would be Syrian as Russia has no MiG-29's in Syria but only in Armenia.