South Stream spring with Putin

Turkey gave Russia permission yesterday to build the South Stream pipeline through its territory to carry its gas to southeast Europe. Botas and Gazprom signed the deal giving the permission required to build the pipeline through Turkish territorial waters.

“We have initiated the dialogue with Erdogan. The deal is like a new year’s gift for both countries,” said Russia’s Prime Minister Vladamir Putin. Turkey and Russia reached an agreement on providing final construction permission for South Stream gas pipeline, which is the biggest rival of Nabucco gas pipeline, to transport Russia’s gas from Black Sea to Europe.

It also would allow Russia to bypass Ukraine. Turkey’s state-run oil and gas pipelines company BOTAS and Russian Gazprom signed the deal giving permission to build the pipeline’s part which will pass through Turkey’s territorial waters. Pleased with Turkey’s decision, Putin described the agreement as “a New Year’s gift for Russia”. After overestimating its gas needs in previous contracts, Turkey has been drawing far less than it had contracted under long-term take-or-pay deals.

Energy Minister Taner Yildiz stated that they had a demand on the gas they didn’t get under take-or-pay deal and 3 billion cubic meters of gas would be transported to Turkey in 2012. Furthermore, Turkey has been among the growing number of consumer countries asking Gazprom to cut its prices.

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