Russia’s Gazprom has signed a protocol with the Turkish government and firm Botas on the planned gas pipeline project TurkStream that will end an arbitration dispute over the gas supply terms and move forward with the construction phase.

The agreement concerned the land-based transit pipeline part of the TurkStream gas pipeline project, which Gazprom said meant that work to implement it could now begin. The construction of the overland section will be carried out by the joint-venture TurkAkim Gaz Tasima AS.

Turkey had delayed issuing a permit for the Russian company to start building the land-based parts of the pipeline which, if completed, would allow Moscow to reduce its reliance on Ukraine as a transit route for its gas supplies to Europe.

Turkish President Tayyip Erdogan said on Saturday that Turkey and Russia had reached a retroactive agreement for a 10.25% discount on the natural gas the country buys from Moscow.

TurkStream will directly connect the large gas reserves in Russia to the Turkish gas transportation network, to provide reliable energy supplies for Turkey, south and south-east Europe. The offshore component of the system will be constructed by PAO Gazprom. The offshore pipeline will consist of two parallel pipelines running through the Black Sea. The pipelines will enter the water near Anapa, on the Russian coast, and come ashore on the Turkish coast some 100 kilometres west of Istanbul, near the village of Kiyikoy.

From Kiyikoy, an underground pipeline will be developed connecting TurkStream to the existing network at Luleburgaz. The route will continue from there to its end point at the Turkish-European border.

The first gas pipeline will have a capacity of 15.75 billion cbm of gas per year.

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29th May 2018

29th May 2018