Russia, Turkey to discuss gas contracts next week
ANKARA/MOSCOW. July 13. (Interfax) - Turkey and Russia will hold high-level negotiations next week, with the gas issue expected to be one of the topics for discussion, a source familiar with the situation told Interfax.
Turkish Prime Minister Tayyip Erdogan is visiting Moscow next week, where he will meet with Russian President Vladimir Putin.
Russia delivers gas to Turkey under three contracts - one for 6 billion cubic meters (bcm) and one for 8 bcm a year through the Trans-Balkan Gas Pipeline (the western route through Ukraine, Romania and Bulgaria), as well as one for 16 bcm a year along the bottom of the Black Sea (the Blue Stream Gas Pipeline).
Last year, Gazprom and Turkish state-owned Botas negotiated on a gas supply contract for up to 6 bcm, which was set to expire in 2011. In an attempt to lower the price, Botas announced its intentions to scrap the contract. In response, Gazprom said that it would negotiate with other Turkish companies on gas deliveries. As a result of the discussions, supply volumes along the western route under the expiring contract were moved to a second contract with validity until 2021.
In 2001, Turkey adopted a law stipulating that Botas must cut its share of gas imports from 100% to 20% by 2009. As a result, 4 bcm of gas that Botas imported from Russia in 2005 were reassigned to four companies: a joint venture between Gazprom and Turkish entrepreneurs called Bosphorus Gas (750 million cu m), Shell Enerji A.S. (250 million cu m), Enerco (2.5 bcm a year) and Avrasyagaz (500 million cu m a year).
In the framework of last year's process of reassigning the contract for 6 bcm of gas, the Turkish regulator received applications from 26 companies. Turkish Energy and Natural Resources Minister Taner Yildiz said that Gazprom negotiated with at least ten to 12 companies.
Gazprom Export delivered almost 26 bcm of gas to Turkey last year, with minimum contractual obligations of 24 bcm.
According to Botas statistics, the company sold and transported 39 bcm of gas last year. As of this May, it was expected that that number would be around 18.5 bcm of gas for 2012 as a whole.
