Deal on gas with Turkey is close, Russians claim once again

Russia could soon reach an agreement with Turkey to set up a trading hub for natural gas, Russian Deputy Prime Minister Alexander Novak said on Russian television today. Russian President Vladimir Putin had already said an agreement was close, according to Bloomberg, during a meeting with Turkish President Recep Tayyip Erdogan in Sochi in early September.

„A roadmap is currently being negotiated, and a Turkish delegation is preparing to visit St Petersburg to familiarise itself with Gazprom’s plans developed in this area. I am confident that agreements on the practical implementation of this project will be reached soon,“ Deputy Prime Minister Novak said, according to TASS.

The agency recalled that President Putin announced a plan last October to send to Turkey all the gas that Nord Stream pipelines were originally intended to transport to Europe. Turkish authorities say the infrastructure is almost ready, but changes to the law are needed, TASS reported.

The Russian plan plays into Turkey’s ambition to act as an exchange for countries facing energy shortages. But discussions have made little progress, as Turkey was hit by devastating earthquakes in February and focused on the May elections. Negotiations have also been delayed by disagreements over who should run the hub, Reuters reported today, citing two unnamed sources familiar with the project.

Before Russia’s attack on Ukraine, Gazprom supplied around 155 billion cubic metres of gas to Europe annually. Last year, however, Russian pipeline deliveries to the European Union fell to 60 billion cubic metres; this year, the EU expects them to drop to 20 billion cubic metres, Reuters previously reported. The EU is making up the shortfall from other sources.

Gazprom’s gas production fell by almost 25 percent year on year in the first half of this year, while its net profit plunged to 296 billion roubles (around CZK 70 billion) from 2.5 trillion roubles a year earlier. In the second quarter alone, the company recorded a loss of 18.6 billion roubles, compared with a profit of 1.03 trillion roubles a year earlier.