Academic journal article Insight Turkey

Turkey and Russia: The Importance of Energy Ties

Academic journal article Insight Turkey

Turkey and Russia: The Importance of Energy Ties

Article excerpt

ABSTRACT Turkey and Russia maintain close energy ties in spite of difficulties in other areas of their relationship. This compartmentalization of ties was tested following the downing of a Russian jet by Turkish Armed Forces. However, the Turkish Stream had been suspended prior to this incident by Ankara, in part because of disagreements over gas pricing. Reconciliation between Ankara and Moscow led to a reactivation of the Turkish Stream. Given their mutual dependency the energy relationship between Turkey and Russia will likely remain fairly immune to possible future downturns in ties.

This article examines the continuing importance of Turkish-Russian energy ties in the face of strains in relations between Ankara and Moscow over Syria. There is an assumption that the shooting down of a Russian jet over Turkish territory in November 2015 led to the collapse of Turkish Stream. However, this much-trumpeted project had already been suspended by Ankara, in part because of disagreements over gas pricing. Focusing on the significance of Russian gas exports and on Russian plans to construct Turkey's first nuclear power plant, this article analyses developments before, during, and after the crisis in relations between Turkey and Russia over Syria. In this context, the Syrian crisis refers to the deterioration of relations between Turkey and Russia in the period from November 2015 to June 2016.

Close energy ties between Turkey and Russia were maintained after Russia invaded Georgia in 2008 and annexed Crimea in 2014. At first sight, the erstwhile successful compartmentalization of energy ties from other aspects of the Turkish-Russian relationship seemed to have collapsed over the fighter jet incident with the suspension of Turkish Stream. However, Turkish Stream had already run into serious difficulties by late July 2015 before the downing of the Russian jet. Meanwhile, Gazprom continued to deliver substantial volumes of gas to the Turkish market after November 2015, and preparatory work by the Russian state-owned Rosatom on Turkey's first nuclear plant at Akkuyu, while slowed down, was not halted.

Turkey is greatly dependent on Russia for gas imports and this may give Moscow some leverage over Ankara's policies. Nevertheless, there is a degree of mutual dependency in energy ties which could also be exploited by Turkish officials. In 2015 Turkey produced only 0.38 billion cubic meters (bcm) of gas. Imports of gas from Russia amounted to 26.78 bcm out of total imports of 48.43 bcm. (1) Gas will remain a crucial component in meeting Turkey's energy needs for the foreseeable future. Ankara is seeking to diversify its gas imports by taking deliveries from alternative sources such as northern Iraq, Turkmenistan, and Israel, and by importing more liquefied natural gas (LNG), but this project will not be realized in the near term due to political and security concerns and a lack of infrastructure. Turkish policymakers are aiming to increase the use of renewables in the energy mix, use more locally produced coal, and develop nuclear power. However, Rosatom's role in constructing Turkey's first nuclear power plant, which is expected to produce 4,800 Megawatts of electricity, will only heighten Ankara's energy dependence on Moscow.

It is important to note, on the other hand, that Turkey is Gazprom's second largest export market after Germany. The suspension of gas deliveries to Turkey without proper legal reasoning would damage Russia's reputation as an energy supplier and would likely result in Gazprom incurring heavy fines for breaking the terms of its long-term gas contracts. Russia is also eager to demonstrate that it is a serious international player in the construction of nuclear power units. However, Russia could still haggle over gas prices or take-or-pay obligations and temporarily reduce gas deliveries without violating the terms of its contracts. In effect, a range of options are available for Russia as a gas supplier to make life uncomfortable for Turkish consumers; this was evident in the months prior to the crisis in Syria when relations between Turkey and Russia deteriorated over the downing of the Russian jet. …

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