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Major Russian pipeline faces revival after rapprochement with Turkey

A major pipeline project that could open a new route for Russian gas in Europe is back on the table as relations between Moscow and Ankara begin to thaw.

Plans for the TurkStream gas pipeline were suspended late last year after Turkish forces shot down a Russian warplane near the Syrian border. However, a sit-down meeting between Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin earlier this week has opened doors for renewed cooperation.

Speaking to Turkey's state-run Anadolu news agency, the country's Foreign Minister Mevlut Cavusoglu cited Putin, saying additional agreements would be signed to make sure the TurkStream gas pipeline moves forward, according to Reuters on Wednesday.


TurkStream itself, though, is not the end goal, Richard Mallinson, a geopolitical analyst at Energy Aspects, told CNBC in a phone interview.

The proposed pipeline route runs from the Russian shore, across the Black Sea, to surface in the northwest Turkish village of Kiyikoy, through Luleburgaz and finally to Ipsala - a town near the Greek border that is expected to serve as a future delivery point for Europe.

"For Russia it's not just about sending gas to Turkey. They can already do that through the Blue Stream pipeline, and they already provide about 60 percent of Turkey's gas. Russia is seeing TurkStream as a route to go on and build a pipeline into Europe," Richard Mallinson, a geopolitical analyst at Energy Aspects, told CNBC in a phone interview.

Officially announced during Putin's state visit to Ankara in December 2014, TurkStream would rely on infrastructure already built for the since-abandoned South Stream pipeline, which was set to run from Russia through to Europe via Bulgaria, but was cancelled for violating European Union competition regulations.

"Russia spent a lot of money on what was due to become South Stream, and is now looking for an alternative," Mallinson said.

Tentative scheduling would see TurkStream completed in 2019, with construction to be led by Gazprom and Turkey's Botas Petroleum Pipeline Corporation.

But while individual EU countries like Greece might been keen for a new source of energy supply that could reduce costs, there are still significant political and practical challenges ahead, with any European pipeline expansion subject to the same EU approval processes as South Stream.

"At the moment at least, the EU is saying it would prefer alternatives, more LNG (liquid natural gas) import terminals, and more pipeline supplies from Caspian (Sea) - not Russian - sources," Mallinson said.

"So from a political and economic perspective, it's still very tricky for Moscow to make TurkStream stack up. The rapprochement with Ankara and Erdogan is one positive step, but by no mean resolves all the challenges," he added.