Russia threatens to increase gas prices for Turkey

May 12, 2006 02:00 AM

by Ercan Baysal

This past winter hindered the transfer of natural gas to Europe the crisis between Russia and Ukraine brought alternate energy sources to the agenda. The West and Turkey, under the leadership of the United States, are headed towards Turkmen, Azeri, Kazakh and Egyptian gas to diversify their resources.
Russia, wishing to sell natural gas to Europe via Turkey and Greece, is anxious over the search for alternative gas. Reportedly, Russia threatened to increase the price of natural gas it sells to Turkey if the country buys gas directly from Turkmenistan.

Discussions inflamed following the meeting between Turkish Minister for Energy Hilmi Guler and Matt Bryza, US Deputy Assistant Secretary of State, who visited Turkey in April. Bryza suggested decreasing the dependence on Russia, buying natural gas from Central Asia and North Africa and transferring it to the West via Turkey.
US Secretary of State Condoleezza Rice repeated this demand during her visit to Turkey in April. Rice particularly insisted on selling Turkmen gas to Europe via Turkey.

The American attempt, which is also supported by Turkey, has been interpreted as "efforts to obstruct the Russian gas giant Gazprom from forming an energy monopoly in Europe."
"Though Turkey buys natural gas worth $ 7.5 bn from Russia annually, the latter does not approve our proposal to decrease the price nor do they support the Samsun-Ceyhan pipeline. We can reinforce our hand if we can put Turkmen, Azeri and Egyptian gas into action," energy circles assert.

Nonetheless, Turkish Minister of Energy Hilmi Guler is cautious not to create any problems in supply security. The European countries that had a conflict with Russia last winter now approve by-passing Russia, and are even researching the possibility of buying natural gas from Iran.
By means of Bryza and Rice, the United States gave Turkey the message that Russia should be isolated in the transfer of the Turkmen gas to European countries, whereas Moscow wants to increase the capacity of the Blue Stream and transfer gas to the EU countries via Turkey-Greece pipeline that is still under construction. This line, also called the Southern Europe gas ring, is slated to be completed this year and start natural gas transfer in 2007.

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