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1 1 (April 11, 2019)

handle is hein.crs/govzhg0001 and id is 1 raw text is: ~Cnresioa Resarc Service 0 April 11, 2019 TurkStream: Another Russian Gas Pipeline to Europe Russia's state-owned natural gas company Gazprom has long sought to protect its share of Europe's natural gas market. Along with the controversial Nord Stream 2 project (see CRS In Focus IF1 1138, Nord Stream 2: A Fait Accompli?), Gazprom's TurkStream project could strengthen Russia's foothold in the European energy market, especially southern Europe. It also could cement Turkey's status as a lead recipient of Russian gas, at a time of relatively strong Turkish-Russian relations. Opponents of the TurkStream project, including the Trump Administration and some Members of Congress, have expressed concern that the project could also help erode Ukraine's transit role for natural gas. In 2018, Gazprom supplied more than 40% of the EU's natural gas imports and about 50% of Turkey's. Many analysts maintain that Moscow could use its energy exports as leverage in countries that are dependent upon Russian natural gas. The United States, in turn, has long supported projects to diversify natural gas supplies to Europe and undercut Russia's market dominance. Background Turkey is Russia's largest natural gas export market after Germany. Russia currently exports natural gas to Turkey through several pipelines (see Figure 1). The Blue Stream pipeline, which became operational in 2003, is a joint project between Gazprom and Italy's Eni that crosses the Black Sea and makes landfall in central Turkey. Russia also supplies gas to Turkey via the Trans-Balkan gas pipeline, which crosses Ukraine, Moldova, Romania, and Bulgaria. The TurkStream project arose after the 2014 cancellation of Russia's South Stream project, a Gazprom-led venture that was launched in 2007 to transport Russian natural gas across the Black Sea to Bulgaria and further into Europe. It was also viewed as a counter to the Western-backed Nabucco pipeline. The South Stream project collapsed, however, in the wake of Russia's invasion of Ukraine and amid a dispute between Gazprom and the EU involving EU regulatory demands. In December 2014, Russian President Vladimir Putin announced the cancellation of South Stream as Gazprom signed a Memorandum of Understanding with BOTAS Petroleum Pipeline Corporation, a Turkish state- owned company, to construct TurkStream. The TurkStream project is to consist of two parallel pipelines with a total capacity of 31.5 billion cubic meters (BCM) per year (15.75 BCM each). The pipelines are to enter the water in Anapa, Russia, and make landfall in Kiyikoy, close to Turkey's border with Bulgaria and Greece. The first pipeline, which is scheduled for completion in late 2019, is expected to supply natural gas to Turkey. The second pipeline, which remains in the planning phase, is intended to deliver gas to European markets via an extension to Bulgaria or Greece. For information on Turkey's status as a regional energy transport hub, see CRS Report R41368, Turkey: Background and U.S. Relations, by Jim Zanotti and Clayton Thomas. Many analysts view TurkStream as a counter to the U.S.- backed Southern Gas Corridor project, which is to transport natural gas from Azerbaijan to Europe. The Southern Gas Corridor, in its present form, includes three connecting pipelines with an annual capacity of 16 BCM-roughly half the proposed capacity of TurkStream: the South Caucasus Pipeline (SCP) in Azerbaijan and Georgia; the Trans- Anatolian Pipeline (TANAP) through Turkey; and the Trans Adriatic Pipeline (TAP), currently under construction from Greece to Italy, via Albania. First delivery through TANAP to Turkey was in June 2018, and TAP is scheduled to begin operations in 2020. Turkey has contracted for 6 BCM from TANAP, and 10 BCM will continue on to Italy. Project Status TurkStream's subsea portion was completed in November 2018. Construction continues for the onshore component between the Kiyikoy terminal and Luleburgaz, Turkey. Figure I. Southern Europe Gas Infrastructure I yci, 0irM n * ( I mnrt TprmirI op rklwo ,q FII ' -I Source: Gazprom, edited by CRS. A proposed extension of the second TurkStream line would transport Russian natural gas from the Turkish landing point to southern and central European markets, either via Greece to Italy, or via Bulgaria, Serbia, and Hungary to Austria. The latter route, which Moscow reportedly favors, would be similar to the canceled South Stream project, albeit smaller in scope. Both routes would require construction of an additional pipeline, and may face issues depending upon ownership structures and EU regulations. A TurkStream extension to Europe has broad domestic political support in Greece and Bulgaria, which could earn revenue from transit fees. Bulgarian leaders stated that an extension through Bulgaria would dovetail with their ttps://crsreports.congress.go1

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