07-06-00 Russia and Italy are now a great deal closer to their joint aim of satisfying a large part of Turkey's rapidly flowering demand for gas. The Russian Duma and the Turkish parliament have now both given full legal approval to the construction of the Blue Stream gas pipeline, reputedly the world's largest single offshore energy transport project. Both parliaments have endorsed the protocol, which governs the fiscal aspects of the project, according to the project's Italian sponsor ENI.
Russia cleared the protocol and Turkey. "The Turkish Parliament's decision," said Vittorio Mincato, CEO of ENI, "represents a fundamental step for the construction of one of the largest gas projects ever envisaged." For the building, financing and operation of the pipeline at sea ENI and Gazprom have set up the jointly owned Blue Stream Pipeline Company BV (BSPC).

The gas pipeline is projected to carry 16 bn cm of natural gas a year, amounting to 400 bn cm over the contractual period. The supply is expected to contribute substantially towards meeting Turkey's energy needs, helping to ensure its industrial and economic development.
The Turkish gas market has the highest growth rate in Europe. Demand there is anticipated to reach 40-50 bn cm of gas a year by 2010, compared to the current level of 13 bn cm.
Blue Stream is one of a number of projects competing to supply the hungry Turkish market. Many others are based on optimistic prospects for hydrocarbon discovery in the Caspian region.
Alongside Blue Stream, which is expected operational by 2002, Turkey's Botas has also agreed to receive supplies from Iran beginning 2001. BP Amoco is also believed to pushing ahead with an export project from Azerbaijan, with a target for completion in 2003. Iraq is well positioned to supply Turkey with gas and according to sources may be ready to supply the country three years after sanctions are lifted there.

Industry sources are less confident in projects from Egypt and Turkmenistan. Certainly the prospects for theTurkmenistan supply to Turkey are considered to have been damaged by gas finds at Shah Deniz, Azerbaijan. Turkey's Botas has made obvious it will limit its commitment to any one of these potential suppliers, keeping its options open to stimulate competition.
The advancement of the Blue Stream project will inevitably add some urgency to the other projects, with company officials now possibly concerned its successful completion could saturate the market. However, Botas itself may not have the guiding reign in the gas market's future as the Turkish government threatens privatisation as part of its need to meet liberalisation targets set by European Union legislation.
Excess gas in Turkey will likely lead to its onward transport to other European markets, with Bulgaria and Romania seen a significant doorway to the Balkans. Blue Stream is expected to connect to the Russian gas pipeline network in the Krasnodar region of southern Russia to the Turkish primary gas line running from Ankara, via a three-section, 1,250 km long, maxi gas line.

The Russian on-shore section, approximately 370 km long, will be followed by two sea lines, each around 380 km long, crossing the Black Sea from the Beregovaya compressor station to Samsun on the Turkish coast, where a 470 km gas line will finally reach the Turkish capital.
The project had been met with a great deal of scepticism owing to the highly sulphurous nature of the Black Sea. The underwater section of the line will be laid at a maximum depth of 2,150 metres, this in itself has never been achieved before. ENI admits the Black Sea offers " extreme and complex conditions".
"Many were sceptical, but ENI's history has been marked by great challenges," Mincato said. ENI's engineering subsidiaries Saipem and Snamprogetti have been charged with design and construction of the line.