Gazprom plans to invest in Turkish market
Posted by meb at October 2nd, 2009
Russian natural gas giant Gazprom is eyeing the growing Turkish market, deputy chief executive Alexander Medvedev told business daily Referans, adding that the firm might invest in the natural gas distribution and electricity production markets.
Gazprom aims to build and operate a center with the Aksa Group, a Turkish energy producer and supplier, in order to sell gas directly to Aksa once Turkey changes regulations that prevent such sales, Medvedev said.
Detailing the company’s negotiations with Botaş, the state-owned Turkish pipeline company, Medvedev said a volume discount in the context of the “purchase or pay” model is being discussed, but no official negotiations have started yet over the issue.
“We have reached an agreement on the political aspects of the Blue Stream-2 project,” said Medvedev. Speaking on Gazprom’s plans for the Turkish market, Medvedev pointed toward current legislative problems.
“Supplying gas to private Turkish companies is expected to take place after the change of legislation,” he said. “We hope that Turkey will take care of this problem in the future. Gazprom and Aksa are considering possible cooperation on subjects such as building and operating a natural gas center.”
Botaş had previously requested a change to the “purchase or pay” clause after it faced difficulties selling the gas purchased from Russian in the market.
“We did not reach the level of official negotiations on this issue,” said Medvedev.
Noting that Turkey is the second biggest gas buyer from Russia after Germany, Medvedev said, “The gas that Turkey purchased in 2008 totaled 23.8 billion cubic meters.” As of Aug. 1, Turkey’s purchase will amount to 12 billion cubic meters, he said, adding that Gazprom expects this year’s total purchases to reach the 2008 level.
Gazprom is waiting to obtain permission from the Turkish authorities to start feasibility work for the South Stream project, a natural gas pipeline that will bypass Ukraine and carry Russian gas to southeast and Central Europe through Turkey, Medvedev said. The pipeline is regarded as a rival to the European Union and United States-backed Nabucco project.
“After obtaining the permissions, we will immediately start working in the Black Sea,” he said. “Cooperating with Turkey on natural gas opens many doors. Our cooperation enables us to lengthen long-term agreements,” such as the West Line agreement, which is expected to expire by 2011.
Noting that the Blue Stream project is still in its early phases, Medvedev said: “We have reached a deal with our Turkish partners on political issues. [Now] we will start negotiating the actual issues.”
Medvedev also said it was too early to talk about Gazprom’s potential interest in Botaş if Turkey decides to privatize the company.
source: Hurriyet daily news
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