'South Stream' to be revived as 'Turkish Stream-2'

'South Stream' to be revived as 'Turkish Stream-2'

Gazprom determined the Turkish Stream gas pipeline's route passing through the territory of Bulgaria, Serbia, Hungary and Slovakia.

It is expected that deliveries to Bulgaria and Serbia will begin in 2020, to Hungary - in 2021, and to Slovakia - in the second half of 2022. The procedure is carried out by Gazprom in accordance with the legislation of the European Union.

In December, Bulgartransgaz plans to conduct an auction for the future capacity of gas pipelines at the entrance to the Bulgarian system from Turkey and at the exit to Serbia. The capacity at the entry point, which is proposed for booking for 20 years from January 1, 2020, is 15.8 billion cubic meters per year. But it is to increase to 11 billion cubic meters since 2021.

These volumes will be supplied from Turkey through Bulgaria using part of the existing infrastructure. It is planned to build the Novaya Provadiya station near the Provadia gas compressor station in the north-eastern part of Bulgaria, which will give a start to a 474 km new gas pipeline.

The gas pipeline will cross the Serbian-Bulgarian border in the town of Zajecar. Thus, it will almost completely repeat the route of the Bulgarian part of the frozen South Stream pipeline. The cost of expanding the system is estimated at $1.63 billion.

In addition, operators from Hungary, Slovakia and Austria have already conducted an auction to reserve new capacities for 7 years starting from October 2022.

All the necessary procedures are expected to be completed by 2019, which will enable Gazprom to completely abandon Ukrainian transit by 2022, the Kommersant newspaper reports.

Deputy director of energy policy of the Institute of Energy and Finances, Alexey Belogoriev, speaking to Vestnik Kavkaza, noted that until concrete contracts are not concluded with European companies, Gazprom is likely to continue developing both Turkish Stream routes - through Bulgaria and Greece. "At the same time, as I understand it, Italian companies have not expressed great interest in purchasing Russian gas in southern Italy, because our gas is traditionally supplied to Northern Italy. Azerbaijani gas will go there via the Southern Gas Corridor in addition to Libyan and Algerian gas, so \southern Italy does not really need to be connected to the continuation of the Turkish Stream," he noted.

"As for the choice of route via Bulgaria as a priority, it is worth noting that when Russia abandoned South Stream, it caused quite serious friction with Serbia and Hungary, our key gas allies in the region, as the decision to cancel the project was not agreed with them. Returning to the South Stream route can be viewed as a friendly step towards them,” Aleksey Belogoryev said.

The executive vice-president of NewTech Services, professor of the Gubkin Russian State University of Oil and Gas, Valery Bessel, noted that choosing the South Stream route to continue the Turkish Stream is explained by minimizing costs. "It’s beneficial to us both economically and politically, because it will bring Bulgaria closer to Russia. But Gazprom will agree on this deal only after receiving mandatory written guarantees from the European Union. Practically there is no such business that could give revenues comparable with those from re-sailing oil and gas, so all potential participants in the continuation of the Turkish Stream to Europe will fight for it," Valery Bessel predicts.