Russian Energy Minister Aleksandr Novak has disclosed that Turkey and Russia will sign a formal agreement concerning the Turkish Stream pipeline project at the end of June after Turkish President Recep Tayyip Erdogan discussed on June 13 the project privately with Russian President Vladimir Putin in Azerbaijan’s capital Baku during Baku’s 2015 European Games.
Novak said, "We are waiting for a permit that is necessary to begin the exploration work in the exclusive economic zone (EEZ) of Turkey and Turkey's territorial waters, where the gas pipeline will lead directly to land,'' according to Russia’s TASS news agency.
''We expect that during the month of June, these permits will be given out, and the construction work on the section of the pipeline will begin,” he added.
Turkish Energy Minister Taner Yildiz previously said, "Once the information regarding the coordinates of the pipeline is received, the permits granted and the talks finalised, construction could begin by the end of the month," in an interview with Reuters.
Yildiz stated that Turkish Foreign Ministry received the coordinates last week from the Russian state-controlled company Gazprom, speaking a reception held this week by the Turkish Wind Energy Association.
He said the necessary permission will be given if the Russians meet with the relevant conditions regarding the first part of the pipeline which has been also the main subject of discussions between Erdogan and Putin, the Turkish Daily Sabah reported.
Yildiz announced that Erdogan and Putin had a very constructive meeting in Baku last week. He has also participated in the meeting and due to leave his post following Turkey’s June 7 parliamentary elections.
Both countries have been meticulously planning for the project since Russia relinquished its plans for the $40 billion South Stream pipeline project in December 2014 due to objections from the European Union (EU) on competition grounds.
The new Turkish Stream project is an alternative pipeline which is planned to bring gas to Europe through Turkey, bypassing Ukraine with an aim of delivering 63 billion cubic metres (bcm) of gas per year - 47 bcm of it to Europe - by 2020.
Reuters previously reported, “Gazprom hopes to create a gas hub at the Turkish-Greek border for transit to Europe, but depends on Turkey agreeing to build on its territory and needs EU countries - many of which want energy independence from Russia - to develop the required infrastructure.”
Novak said they will have negotiations with the EU on the Turkish Stream on June 27-28.
He also stated that there are Russian companies and banks which are willing to finance the Greek part of the project.
The first part of the project is expected to be valued at 3.3 billion euros.
The Russian minister said Turkey may join the construction of the pipeline’s offshore segment within its EEZ which refers to a 280 km of pipes along the Turkish coast beneath the Black Sea, the Turkish Hurriyet Daily News reported.
Yildiz previously remarked that "We are talking about partnership and ownership here. We need to set up the mechanism very carefully for this. We are looking to become a partner in the costs."
“The project is still at the working out stage, but the Russian side is ready to take part in financing infrastructure construction,” Novak added.
Kremlin spokesman Dmitry Peskov previously stated that Putin will meet with Gazprom CEO Alexey Miller in order to discuss his meeting with Erdogan.
Turkey is Gazprom’s second biggest export market after Germany and that the country is looking to secure a 15 percent gas discount from Gazprom through the project, according to Turkish government sources.