On April 2 the Turkish Atomic Energy Authority granted Rosatom a construction license for the first unit of the Akkuyu nuclear power plant. Presidents Putin and Erdogan later on attended the symbolic ground-breaking ceremony for Turkey’s first NPP on the Mediterranean coast, whose four reactors are going to cover 10% of the domestic energy demand. According to the interstate agreement between Russia and Turkey signed in 2010, that took eight years to materialize because of the stricter standards set by the EU and the IAEA following the Chernobyl and Fukushima nuclear accidents, Rosatom will own, construct and operate the Akkuyu NPP. The project constitutes Turkey’s fifth attempt to obtain nuclear reactors in 60 years’ time. Akkuyu NPP forms part of a wider plan to have another two nuclear installations built in Sinope, on the Black Sea coast, and Igneada, close to the Turkish-Bulgarian border, about 250km away from Greece. A French-Japanese consortium of MHI and Engie will control a 51% stake in the Black Sea project, agreed-upon back in 2013 between President Erdogan and the Japanese PM Shinzo Abe.
The importance of the Akkuyu NPP lies in the fact that it can reduce Turkey’s overreliance on energy imports from Russia, now representing about 53% (24.54BCM, mostly transported through the Blue Stream and Western Line pipelines to BOTAS) of the country’s overall natural gas consumption. Russia also comes second with respect to crude supplies to Turkey, right behind Iran. However, Ankara’s dependence on Russian funding and technical know-how is by no means lessened and this could have an effect on its relations with the EU and, therefore, on the project’s final fate. According to the Commission’s Spokesperson for Climate Action and Energy, the Bloc remains in close contact with the Turkish authorities, in order to ensure that any of Turkey’s future NPPs will be constructed, commissioned and operated safely in line with the EURATOM Treaty and all secondary legislation. But, in spite of this rudimentary rhetoric, the abandonment of a 2000-megawatt nuclear power project in Belene back in 2012, that was equally going to be constructed by Rosatom, due to Bulgaria’s EU accession, is still a vivid memory proving that geopolitical hurdles can often stand in the way of even the most ambitious energy plans.
Apart from the Akkuyu NPP, inaugurated a couple of months after the contracts for the El Dabaa Nuclear Project, which is also the first NPP for Egypt, were signed by Presidents al-Sisi and Putin, Russia and Turkey have additional energy infrastructure of common interest to deal with. The TurkStream pipeline project, that will come online after 2020 will render Turkey a crucial transit spot for Russian natural gas exports towards the south of Europe, and, along with the Trans Anatolian Pipeline (TANAP), are believed to be strengthening BOTAS’ negotiating position with regard to prices and other contractual terms after expiration of the current long-term agreements with suppliers. With the first 15.75BCM/a TurkStream line expected to be completed in May, it should be interesting to see whether Gazprom will connect the pipeline’s extension to Austria’s Baumgarten, via the territories of Bulgaria, Serbia and Hungary, or whether it will bid for the extra 10BCM/a capacity of the Trans Adriatic Pipeline (TAP) through the open-season auctions (providing that TurkStream is not completed well before TAP), or whether it will decide to link this line with ITGI Poseidon, again via Greece.
Last week was not, however, all about a Russian-Turkish dialogue, as the two leaders were joined in Ankara by Iranian President Hassan Rouhani in a trilateral summit. Energy ties between Russia and Iran are no less critical than those between Russia and Turkey. In the outcome of the meeting, one can find a number of up to $50bn of prospective Russian investments in Iran’s oil and gas sector. Indeed, a series of Russian firms have within the last few months expressed their interest in developing Iranian fields in the Persian Gulf and the Caspian Basin under the framework of the more investor-friendly Iranian Petroleum Contract (IPC), including Gazprom, Rosneft, Tatneft (Shadegan), Gazprom Neft (Azar, Changuleh), Zarubezhneft (Rage Sefid, Shadegan, Susangerd, Aban, West Payedar) and Lukoil (Caspian Sea fields). Attracting investment interest from non-Western energy companies, like the ones coming from Russia or China (notably, the Total-CNCP contract for South Pars’ Phase 11), can help Iran diversify its energy portfolio, in case a renewal of US nuclear-related sanctions locks once again the country out of the international energy markets. Iran’s energy cooperation with Turkey is also kept active in terms of gas and crude exports from the one to the other, even though BOTAS will likely try to lift destination clauses in future contracts with Tehran, in order to be able for re-exports. Besides, Iran eyes its participation in the Southern Gas Corridor (SGC) pipeline project through TANAP, albeit this will be determined by the final number of suppliers from the Caspian and the Middle East that will line up for the project.
Two conclusions can hence be drawn from this latest tripartite entente among Turkey, Russia and Iran. Firstly, Turkey seeks to avoid the isolationism most Western observers associate with its regime and profit from regional alliances (past trilateral meetings have involved Azerbaijan and Georgia, Serbia and Bosnia) in response to similar trilateral and quadrilateral working groups comprised of Israel, Egypt, Italy and, of course, Greece and Cyprus, where tensions have recently escalated over the control of territorial waters and airspace in the Aegean Sea, as well as gas exploratory drillings by international energy firms within the Cypriot EEZ. Finally, Russia’s energy pacts with states in a vast geographical section, from Egypt, Syria and Turkey to Saudi Arabia and Iran imply the country’s efforts to gain status of a regional heavyweight wishing to combat US influence in the region.
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