Gazprom: Natural gas discount for Turkey not on agenda

On the eve of a visit to Turkey by Alexander Medvedev, deputy chairman of the board of executive directors of Russian energy company Gazprom, a reduction of prices on gas exports to Turkey — which pays a high price for gas — is not on the agenda, Gazprom sources have said.

The same sources stressed that during Medvedev’s visit, cooperation on natural gas issues between Turkey and Russia will top the agenda. Turkey will seek a discount in the price of gas it buys from Russia in talks with Medvedev on Monday when he visits Ankara, Energy and Natural Resources Minister Taner Yıldız said on Friday.

“The contract we have with Russia gives us the right for a price revision. We will convey our demands regarding this [price revision] to Russian and Gazprom officials,” Yıldız told reporters.

To meet rising demand in Turkey, Ankara also wants an increase in the annual capacity of the Blue Stream pipeline, which carries Russian gas to Turkey under the Black Sea. Ankara will ask for an additional 3.5 billion cubic meters (bcm) on top of its current capacity of 16 bcm. A potential re-routing of Russia’s South Stream pipeline will also be discussed after Turkey said it was open to the possibility of letting the controversial conduit pass through its territory if Moscow made such a request.

The massive South Stream project is seen as crucial for Russia’s ambitions to cement its position as Europe’s dominant gas supplier, but the venture has been thrown into doubt by tensions between Ukraine and Moscow. “No request has been made yet. We will discuss all of these issues on Monday,” Yıldız added.

Turkey’s energy import dependence has been on the rise over the past decade and the country depends heavily on Russia, from which it buys around 58 percent of its natural gas. Turkey also imports around 12 percent of its oil from Russia. In addition to natural gas dependence, Ankara also has significant trade relations with Moscow.

The trade volume between Russia and Turkey is expected to grow to $100 billion in the coming years. According to Gazprom, in the first four months of 2013, natural gas exports to Europe amounted to 54.7 bcm. The Western European market, including Turkey, absorbs the bulk of Russian supplies. In 2012, Gazprom delivered 111.13 bcm of gas to this market. The biggest importers are Germany, with 34 bcm, Turkey with 27 bcm and Italy with 15.1 bcm.