Russia-Turkey Gas and Defense Agreements
March 9, 2018
Russia-Turkey Gas and Defense Agreements
Turkish-Russian relations have enjoyed certain ebbs and flows after the dissolution of the Soviet Republic. Although mutual suspicion has continued, the relations have flourished especially after the arrival in power of the AKP government in Turkey in 2002 and proceeded apace. Tension erupted between Ankara and Moscow in 2015, when Turkey shot down a Russian warplane on Turkey’s border with Syria. After close to one year of hiatus in diplomatic relations, Erdogan first sent two letters to Putin and then travelled to Moscow in June 2016. As Turkey’s relations gradually deteriorated with its NATO allies, Ankara was gravitating towards Russia. One of the main drivers of the bilateral relations is the personal relationship between Mr. Erdogan and President Vladimir Putin of Russia. Mr. Erdogan has expressed personal admiration for Mr. Putin, to the consternation of many European and American leaders.
Turkey is one of the largest consumers of Russian gas. There exist three important gas agreements between Russia and Turkey: West Line (Batı Hattı), Blue Stream (Mavi Akım), and the Turkstream (Türk Akımı). Gas pipeline agreements between Turkey and Russia date back to the early 1980s, when both countries signed an agreement on the delivery of natural gas in 1984. Within the scope of the agreement, natural gas imports started gradually from 1987 and reached the maximum amount of 6 billion m3/year in 1993. The route passed through Romania and Bulgaria, known as the West line. Later, in 1997, Ankara and Moscow signed an agreement for the inauguration of the Blue Stream gas line, which envisaged the transport of gas natural gas from the Russian Federation to Turkey through a transit line under the Black Sea. As per the agreement, 16 billion cubic meters of gas per year was supplied to Turkey. The financing and the construction of the project was jointly undertaken by BOTAS (Turkey’s state-owned crude oil and natural gas pipelines and trading company) and the Gasexport (the Russian oil and gas company).
Both countries signed an agreement on October 10, 2016 in for the inauguration of Turkstream project. Turkish Stream aims to transport 31.5 million cubic meters of gas to the West of Turkey as well as a number of European countries through a transit line from the Black Sea. It is comprised of two strings: the first string is intended for Turkish consumers whereas the second string is to be delivered to Europe. Each string will have the throughput capacity of 15.75 billion cubic meters of gas per year. On May 7, 2017, construction of the TurkStream gas pipeline was commenced in the Black Sea near the Russian coast. As of March 2018, some 50 percent of the offshore section for the TurkStream Offshore Gas Pipeline has been installed, the project company announced in a statement on March 6.
After the dissolution of the Soviets, the Defence relations between Turkey and Russia kicked off, though they were small in scale. A deal worth $190 million-dollar in the 1990s stipulated the sale of armored personnel carriers, auxiliary vehicles machine guns, and ammunition to Turkey. Due to Russia’s war in Chechnya, Turkey lost interest in the Russian market, disappointing Russian hopes that it would become a major new market for Russian hardware for further contracts. Between 2008 and 2010, the Russian Rosoboronexport supplied Turkey with 80 Kornet-E antitank missile systems with 800 missiles.
The defense relations really gained momentum after Turkey’s rapprochement with Russia following the end of the conflict originating from the shooting of a Russian plane by Turkey over the Syrian border. As Turkey’s relations with the West have also soured due in large part to the tensions between the EU and Turkey as well as U.S. collaboration with the Kurds in Northern Syria, Ankara saw in Russia a strategic partner to fill the void. As Germany imposed arms embargo on Turkey for its human rights violations, Turkey announced in December 2017 that it had signed an accord for Moscow to supply Ankara with S-400 surface-to-air missile batteries. The deal, which is worth some $2.5 billion, stipulates the initial delivery for the first quarter of 2020.
The uptick in the trade relations between Ankara and Moscow is without a doubt one of the eye-catching diplomatic components of the AKP government in Turkey. From a mere $5 billion dollars in 2002, the trade volume reached $25 billion dollars in 2007, making Russia, Turkey’s second trading partner after Germany. While trade volume more or less progressed, 2015 diplomatic crisis characterized by the downing of a Russian jet by Turkey dealt a heavy blow to Turkey’s exports to Russia. The trade volume plummeted to $16.9 billion in 2016 from almost 24 billion in 2015. It picked up again in 2017 reaching $22.2 billion; however, it needs to be borne in mind that the bilateral trade relations have been mostly in favor of Russia with Russian exports towering over the Turkish ones to Russia. For example, while Turkish exports to Russia stood at $2.7 billions, Russian exports to Turkey were $19.5 billion dollars. Turkey’s exports to Russia are predominantly fruits and vegetables, car accessories, vehicles, and fish whereas Russian exports to Turkey mainly are petroleum products, coal, and chemical products.
In October 2016, Sputnik reported that Russia and Turkey were ready to sign a free trade agreement as early as the end of 2017. However, as of today, the trade agreement has not yet been signed.
*Map Source http://www.enerji.gov.tr/en-US/Pages/Natural-Gas-Pipelines-and-Projects
By Vahid Yucesoy for iStrategic