Turkey And Russia Sign Energy Agreements, Focus On Nuclear, Samsun-Ceyhan Pipeline

Turkey And Russia Sign Energy Agreements, Focus On Nuclear, Samsun-Ceyhan Pipeline

Few details have emerged from the discussions that took place in Ankara during Russian President Dmitri Medvedev’s visit on 11-12 May, apart from an announcement that Russian state-owned nuclear energy company Atomstroyexport will build, own and operate a 4.8gw nuclear power plant at Akkuyu on Turkey’s southern Mediterranean coast. The project, Turkey’s first nuclear power plant, is to cost some $20bn and take around seven years to complete. During the course of Mr. Medvedev’s stay, 17 separate agreements were signed, many of which focused on energy and trade. It was reported that in total the agreements are worth about $25bn and over the next three years the two countries plan to boost trade to some $100bn.

Turkey and Russia also agreed to move forward with developing the Samsun-Ceyhan crude oil pipeline. Russia has signed agreements with Italy’s Eni and Turkey’s Calik Holding about joining the Trans Anatolia Pipeline Project (TAPCO), which will run across eastern Turkey to Ceyhan (MEES, 26 October 2009). Talks have taken place concerning Russia’s Transneft and Rosneft taking a share in the company and supplying the 1-1.5mn b/d capacity pipeline with crude oil. The two Russian firms are understood to have signed documents in Ankara, but details have yet to emerge. Russia became interested in joining TAPCO after Bulgaria’s government last year said it wanted to re-evaluate the proposed Burgas-Alexandroupolis oil pipeline, in which Transneft holds 51%.

The Burgas-Alexandroupolis and Samsun-Ceyhan projects are designed to reduce crude tanker shipments through Turkey’s Bosphorus and Dardanelle Straits of as much as 2mn b/d of crude and products. Russia has proposed that the two projects be merged to have one management company and thereby practically eliminate crude tanker shipments through the Turkish straits, but it stated recently that it will wait until Sofia makes a decision on its participation in Burgas-Alexandroupolis before it pursues the idea further (MEES, 12 April, 1 March, 22 February). Also, Russia is considering participation in a refinery to be constructed at Ceyhan.

Turkish Prime Minister Recep Tayyip Erdogan visited Moscow in January to discuss the nuclear power project and Russia’s South Stream gas pipeline project (MEES, 18 January). Turkey has agreed to allow South Stream to cross its offshore Black Sea territory. Meanwhile, Russia has agreed to allow Turkey to take 25% of the gas it is contracted for and to pay 10% less. Russia provides Turkey with about 70% of its gas demand through overland pipelines entering the country through Bulgaria and the Blue Stream gas pipeline, which crosses the Black Sea. Russia expects to deliver about 30 bcm to Turkey during 2010. 

Copyright MEES 2010.