What does TurkStream mean for Russia and Turkey?

Editor's note: Guo Xiaoqiong is an associate research fellow at the Institute of Russian, Eastern European and Central Asian Studies, Chinese Academy of Social Sciences (CASS) and program manager of the Council on China-Russia Strategic Coordination, CASS. The article reflects the author's opinions, and not necessarily the views of CGTN.

On January 8, 2020, the inauguration ceremony of the TurkStream gas pipeline will be held in Istanbul, and Turkish President Recep Tayyip Erdogan and his Russian counterpart Vladimir Putin are expected to attend the ceremony.

TurkStream stretches from Anapa in southwest Russia, passes through the Black Sea, and comes ashore near Kiyikoy in the Thrace region of northwestern Turkey.

TurkStream consists of two lines with one supplying natural gas to Turkey and the other going further inland to reach southeastern Europe. In the future, Russia will supply 31.5 billion cubic metres (bcm) of natural gas to Turkey and southeastern Europe annually through these two lines.

How would this benefit Russia?

First of all, TurkStream can reduce Russia's dependency on energy supply routes passing through Ukraine. For a long time, Russia's natural gas has made its way to the European market via Ukraine.

In 2008, natural gas supplied via Ukraine to Europe accounted for 95 percent of Russia's total exports to Europe. In order to bypass Ukraine, Russia has in the past initiated the construction of Nord Stream 1, Nord Stream 2, Blue Stream, South Stream and other pipelines.

Following the Ukraine crisis, Russia-EU relations deteriorated, and the South Stream project was halted. Russia decided to build TurkStream on the basis of Blue Stream. TurkStream, Nord Stream 1 (in operation) and Nord Stream 2 (still under construction) can bypass Ukraine, and together, will form a strategic corridor for Russia's natural gas supply to the EU.

Secondly, TurkStream is conducive to strengthening the Russia-Turkey strategic cooperation. After the TurkStream project kicked off, Russia-Turkey relations quickly warmed up. Russia sought to deepen relations with Turkey through energy cooperation and strengthen Russia-Turkey strategic cooperation, so as to have Turkey's political support, mitigate the adverse impact of Western sanctions, and strengthen its influence in the Middle East.

Thirdly, the pipelines will also partially mitigate the impact of Western sanctions. Russia's economic growth is heavily dependent on energy exports. After the Ukraine crisis, Russia's economy has been thrown into a crisis and has not yet recovered. TurkStream will not only boost Russia's natural gas exports to Turkey, but also expand its gas supply to southeastern European countries such as Greece, Hungary and Serbia, hence increasing its energy export revenue.

Turkey has nothing to lose and all to gain

Firstly, as Turkey faces a shortage of domestic energy production and relies heavily on energy imports, the arrival of TurkStream will reduce its dependency on the Middle East for energy imports and give it access to a long-term stable source of natural gas supply.

Secondly, the pipeline will strengthen Turkey's strategic position as an energy hub. Its geographic position is close to Russia, the main energy producers in the Middle East and energy importers in Europe. For many years, Turkey has been committed to building energy infrastructure in the hope of linking energy importers and exporters. The completion of TurkStream will consolidate its position as an energy hub, and Turkey will also be able to collect transit fees to balance its energy trade deficit.

Thirdly, the inauguration of the pipeline will increase Turkey's leverage against the US and EU. Contradictions between the US and Turkey over Kurds, Syria and other issues have intensified in recent years. Stronger strategic cooperation with Russia will allow Turkey to align itself with Russia against the United States. Besides, the country's accession to the EU has been stalled. Through the TurkStream project, Turkey will be able to improve its status as an energy transit country and gain greater leverage in its engagement with the EU.

What does the US think?

On December 17, 2019, the US Congress passed the 2020 National Defense Authorization Act which imposes sanctions on companies involved in the construction of North Stream 2 and TurkStream gas pipeline projects.

The US had two things in mind while imposing these sanctions.

First, it hopes to grab a larger share of the European natural gas market. After the shale gas revolution, the US has become a major natural gas exporter. However, its LNG is much more expensive than Russia's pipeline gas. Therefore, it tries to meddle with the Russia-EU natural gas cooperation to suppress Russia's influence.

Second, after the Ukraine crisis, there have been structural contradictions in Russia-US relations. By slapping sanctions on Russia, the US hopes to hold back Russia's economic development and set up barriers for Russia to develop Russia-EU and Russia-Turkey relations. Nevertheless, Nord Stream 2 is about to be completed, and TurkStream has been commissioned for gas transport. In the future, the game among big powers will unfold further depending on the actual influence of these projects.