A New Pipeline Feeds Turkey's Greater Ambitions
August 25, 2015.-
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TurkStream will play into Ankara's goal of becoming a key energy transit hub at the crossroads of Asia, Europe and the Middle East.
Forecast
- Turkish demand for energy will keep rising as the country industrializes, leaving Turkey reliant on energy imports for the foreseeable future.
- Turkey will leverage its substantial negotiating power in TurkStream talks with Gazprom to secure significant discounts on Russian natural gas.
- Turkey will continue to pursue other pipeline projects as part of its longer-term strategy to position itself as a regional energy transit hub to gain influence with its neighbors.
Analysis
Europe
and Russia continue to spar for political influence in Eurasia in the
latest battle over Russia's TurkStream pipeline project, formerly known
as Turkish Stream. But as the two major powers pursue loftier goals of
power and containment, Turkey — a country with regional aspirations of
its own — is quietly maneuvering to secure its position as a crucial
energy transit hub at the crossroads of the Middle East, Europe and
Asia.
A Growing Need for Energy
Turkey's position on Russia's TurkStream pipeline is far more straightforward than that of Europe or Russia.
In short, Turkey lacks energy resources and has always relied on
significant imports to meet the demands of its economy. As Turkey
continues to industrialize and take its place as a regional power, its energy needs will only grow, and perhaps quite rapidly.
Russia
maintains a comfortable hold on its position as Turkey's largest
supplier of natural gas. In 2014, Russian natural gas accounted for 55
percent of Turkish natural gas consumption. Ankara is uneasy about
Turkey's heavy reliance on Russian natural gas, particularly in light of
the two countries' greater competition for influence in
the Black Sea and the Caucasus. These concerns are only deepened by the
fact that Turkey lies at the end of the supply chain routing Russian
natural gas through Ukraine, putting it at risk of supply shortages in
the event that Russia cuts off flows to Ukraine. But no alternative
supplier currently exists to satisfy Turkey's domestic consumption.
Given
its lack of options, Turkey will most likely choose to support the
TurkStream project in the end. Still, it will probably hold out on
finalizing any deal until it can pressure Gazprom, Russia's state-owned
natural gas company, into granting Turkey heavy discounts on Russian
natural gas in exchange for its backing.
Larger Goals Drive Ankara's Strategy
Beyond
the immediate benefit of guaranteeing cheaper natural gas for Turkish
consumers, the TurkStream pipeline will play into Turkey's longer-term
aspirations of establishing itself as a key energy transit hub at the
intersection of Europe, Asia and the Middle East. Turkey hopes to then
use its newfound role to reshape its partnerships and reassert its
influence in the wider region.
With
this objective in mind, Ankara has long promoted the majority of energy
transit projects that would pass through Turkey. Some of these projects
include the Blue Stream II, which would have transported Russian
natural gas to the Levant; the ill-fated Nabucco pipeline, which would
have sent Azerbaijani natural gas to Central Europe; and most recently,
the Trans-Anatolian Pipeline (TANAP) and Trans-Adriatic Pipeline, which
will send Azeri natural gas to Europe. In each case, Turkey stood to
benefit by collecting both transit fees and natural gas supplies from
the pipelines running across its territory.
Interactive
Interactive: Veins of Influence
The
TurkStream pipeline would offer a similar opportunity at a time when
Turkey is gaining a greater ability to take advantage of its strategic
location. In previous years, a number of geopolitical constraints have
undermined Turkey's value as a potential energy transit state. Western sanctions against Iran,
for example, have tabled the option of sending Iranian natural gas to
Europe, while the state of relations between Moscow and Brussels has
largely determined the success or failure of several proposed routes.
But the recent agreement between Iran and the West
could pave the way for exporting Iranian natural gas to Europe by the
mid-to-late 2020s, while Moscow and Brussels have begun to put their
full political thrust behind the TurkStream and TANAP projects,
respectively. With these developments, Turkey may now be in a better
position to leverage its location to push for pipelines that traverse
its borders.
With
several alternative pipeline routes to Europe in play, Russia is seeing
its own options narrow. The European Union is continuing to push
forward with all of its Southern Gas Corridor projects, for which
Turkmenistan has long been viewed as a potential source of natural gas.
Although the controversial issue of piping natural gas across the
Caspian Sea historically has been a deal-breaker for any Trans-Caspian
route, Moscow has signaled that the Caspian countries may well sign a
deal establishing maritime rights during the upcoming 2016 Caspian
Summit. Meanwhile, the possibility of Iran emerging as a new European
supplier in the wake of Russia's South Stream failure has left the
Kremlin scrambling to find a viable transit alternative to Ukraine, and
quickly. Turkey may be the only logical partner Russia has left.
None
of this is to say Turkey will not be taking a risk by backing the
TurkStream project. Turkey remains heavily dependent on Russian natural
gas, although it has asserted that TurkStream will not increase its
reliance on Russian supplies. Ankara has argued that it will merely be
swapping Russian natural gas imported via Ukraine with imports sourced
from TurkStream and that Russia's increased dependence on Turkey as a
transit state will balance their energy relationship somewhat.
But
the TurkStream project also will not prevent Turkey from seeking other
alternatives, and it has not affected the construction of the TANAP
project. Ultimately, the power in the TurkStream negotiations lies with
Ankara, which will use its advantage to pursue its own regional
ambitions. Meanwhile, Russia, lacking any other southern corridor
options, will have little choice but to meet Turkey's demands.