SECRETARIA DE COMUNICACIONES Y TRANSPORTES CENTRO SCT GUERRERO

• The possibilities for further connection to gas networks in South-eastern, Central and Western Europe.

The current cost of Southern Gas Corridor, including upstream work on Shah Deniz Phase II, is now estimated at around $40 billion, including $9.3 billion for the Trans-Anatolian Gas Pipeline, $6 billion for the Trans Adriatic pipeline and $23.8 billion for developing Shah Deniz Phase II, as well as the expansion of the South Caucasus line (Shaban, 2016).

3.2.3.5. Turkey-Greece-Italy Interconnector

The overall Interconnector system is comprised of the Turkey-Greece Interconnector and Greece-Italy Interconnector onshore and offshore (Socor, 2016). The project includes three segments: expansion of the Turkish national grid for transmitting natural gas to Italy and Turkey, building a pipeline between Turkey and Greece and the building of a further pipeline between Greece and Italy (Hydrocarbons Technology 2015a). The 296km long Turkey-Greece Interconnector (Karacabey-Komotini) section, became operational in 2007. The annual capacity of the pipeline is 11.5 bcm. The investment cost of the pipeline was 165 million euros for the Turkish and 118 million euros for the Greek section (Hydrocarbons Technology, 2016).

The construction of the 807km long proposed Interconnector Greece-Italy segment, will take place in two sections: 207km underwater crossing the Ionian Sea and 600km ground section (Hydrocarbons Technology 2015a). The 207km section, known as the Poseidon pipeline, requires an estimated investment of 500 million euros. The 600km section, also known as IGI Onshore, is an onshore pipeline and was built by DESFA (Hydrocarbons Technology, 2016).

The Interconnector Greece-Bulgaria bypass line will be 181km long (150km in Bulgaria and 31km in Greece) and will connect the Greek gas network in Komotini with the Bulgarian gas network. This pipeline project and the Trans-Adriatic Pipeline (which also transports natural gas from the Caspian Sea, from Greece-Albania-Adriatic Sea-Italy and further to Western Europe), have the potential to turn Greece into an energy hub in southern Europe (Reuters, 2016). 3.2.3.6. TurkStream Natural Gas Pipeline

Turkey and Russia are interdependent, particularly in economic and energy terms. Russia, as Turkey's largest trading partner, supplies more than half of Turkey's

natural gas consumption and one-fifth of its domestic oil needs. The share of natural gas in electricity generation is 48%, which is a clear indication of the country's high dependency on natural gas, to generate electricity. 70% of Turkey's gas imports from Russia come through the Trans-Balkan pipeline, which travels via Ukraine, through Moldova, Romania, and Bulgaria (Gurbanov, 2015). In winter alone, Turkey imports 48 mcum through Blue Stream and 42 mcum natural gas from Russia daily, through the West Stream. In the case of an energy crisis between both countries, Turkey does not have the manoeuvrability to diversify its energy sources in a short time and receive adequate amounts of gas from other suppliers, compared to Blue Stream and West Stream pipeline. Furthermore, the country is still very much behind on meeting its energy deficit with renewable energy sources, despite its great potential, particularly in wind, hydropower and geothermal energy. Turkey’s heavy dependence on Russian energy obligates the country to play this energy game by Russian rules. Turkey has many bilateral trade and infrastructure deals with Russia, which would be affected by any conflict, including the proposed construction of TurkStream pipeline and Akkuyu nuclear power plant projects. Considering the energy targets of the Energy Ministry of Turkey, gaining energy independence is of greatest importance. In order to reach this target, the country is planning to operate a nuclear powerplant, which, nevertheless, will be built by Russia. Turkey is thereby opening a new energy dependency chapter with the same country. Ultimately, Turkey’s energy policies do not seem parallel with its primary targets. The policies are ensuring further energy dependency and that engenders the strange irony that: Turkey needs Russia, to gain its energy independence from Russia.

Nabucco has emerged as the key project of the East-West energy corridor, in the supply of energy to Europe from the Caucasus and to give the Middle East a gas hub in Austria, via Turkey, Bulgaria, and Romania, South Stream. Simultaneously, a Russian-led project to side-line Nabucco and compete with the construction of an alternative pipeline to Europe, has also emerged. The construction of Nabucco was expected to start in 2013, with the first gas scheduled to flow in 2017. It was planned that the pipeline would carry 31 bcm gas per year (Gotev, 2015). Nevertheless, the Nabucco project is suspended and now only three smaller projects are available, to compete for the supply right to the EU, through the Turkish-EU border (Gotev, 2015):

• Nabucco West – via Bulgaria and Romania to Austria

• Trans-Adriatic Pipeline – via Greece to Italy

Initially, South Stream was planned to start from the Russian coasts of the Black Sea, travel through Ukrainian waters in the Black Sea to Bulgaria, Serbia, Hungary, Bosnia and Herzegovina, Croatia, Austria and Italy, pumping 63 bcm of gas annually. However, due to political conflicts in Ukraine, Russia agreed with Turkey to re-route South Stream through Turkish seashores (Gurbanov, 2015).

On 1st _{December 2014, the Presidents of Russia and Turkey, Vladimir Putin and} Recep Tayyip Erdogan, met in Turkey, where Putin announced significant issues like "the suspension of South Stream pipeline", "increasing gas supply for Turkey", "expansion of Blue Stream pipeline's capacity" and "6% gas discount for Turkey". On the same day, Turkish BOTAS and Russian Gazprom, signed a memorandum of understanding, to construct a new, offshore natural gas pipeline across the Black Sea to Turkey, named "TurkStream." A year later, Greece joined this joint enterprise, for the construction of a pipeline across Greek territory. As planned, the offshore part of the pipeline will cross the Black seabed. The length of the offshore section will be around 910km (Gazprom Export, 2017).

The new gas route also means a third gas link between Turkey and Russia, which increases the gas dependence of Turkey from 58% to 70%. The pipeline will surface on the shore of the European part of Turkey, near Kiyiköy, with a gas delivery point at Lüleburgaz, for the Turkish customers and as the distribution point for the European customers at Ipsala, the border crossing between Turkey and Greece (Map 3) (Gazprom Export, 2017). Map 3. The planned route of the TurkStream Pipeline Data source: Russia Business Today 2018.

The length of the Turkish onshore section will be 180km. The annual capacity of the pipeline will be 63 bcm. About 16 bcm gas will be supplied to Turkey, and the remaining 47 bcm gas is contemplated for the new gas hub, designed to be constructed on the Turkish-Greek border, which will then be further transported to Europe (Gurbanov, 2015).

In reality, a memorandum of understanding is non-binding for both parties, meaning many negotiations are needed to realise the TurkStream project. The experts hold different opinions concerning Turkey's pipeline agreement with Russia. Erdal Tanas Karagöl, an Economist from the SETA Foundation and a presumptive nominee of parliament from the AKP, sees the pipeline project as a positive decision. He discusses that Turkey's efforts regarding new energy pipelines, have now come into fruition. Moreover, he interprets the placing of Turkey at the centre of energy pipelines, makes Ankara an important agent in the decision-making process concerning energy subjects. On the other side, Cüneyt Kazokoglu, an energy market expert, assumes that natural gas and nuclear power agreements with Russia will only increase Turkey’s energy dependence on Russia. He explains:

"Between 2003 and 2013 our natural gas imports from Russia are doubled: 13 bcm natural gas we imported in 2003, had increased to 27 bcm in 2013. Now with Turkey Stream, our energy dependency on Russia will even multiply. Therefore, Russia has the word and power again on the pipeline politics, not the Turkey".

The construction of Akkuyu Nuclear Power Plant in Turkey will be carried out in collaboration with Russian Rosatom. Through this nuclear partnership, Russia hands over the operational control of the power plant, as well as the selling price of nuclear- powered electricity on the market. Besides this, Russian employees will work in the engineering department of this nuclear power plant. The necessary materials for the power plant will also come through the imports from Russia. Ultimately, Turkey will be dependent on Russia both in natural gas and nuclear energy.

Consequently, Turkey, by putting all eggs in one basket, will possess no space to bargain over import prices. The current data from EPDK shows that Turkey imported 49.2 bcm of natural gas in 2015. Russia has the highest share of 54.7% (26.9 bcm) in Turkey's gas imports (Anonym, 2015). To diminish the amount of natural gas imports, it is essential for Turkey to modernise its energy infrastructure and diversify its import supplies as much as possible. Diversification of gas imports will help the country to

decrease the focus of its energy dependence being placed solely on one country. It will also reduce risks in the case of gas disputes between the supplier countries, such as the frequent gas conflicts between Russia and Ukraine. Ensuring supply security is one of the fundamental elements required to achieve a sustainable economic growth. In this regard, transportation of natural gas to Europe via Turkey, with the TurkeyStream pipeline, will be one of the key determinants of providing energy supply security. Moreover, AKP has maintained its "axis expansion policy" since 2002, by improving its trade relations and partnerships with Russia in the energy field (BBC, 2014).

From the very beginning, South Stream was a project based on politics and not economic rationale. The project was terminated due to the EU's opposition to the pipeline, which it did not comply with the "Third Energy Package". The third energy package of the EU endeavours to introduce more competition by breaking up energy monopolies. In essence, this means that the supplying company cannot also own the pipeline. The pipeline must be held by a third-party in order to foster competition – a requirement that neither Gazprom nor the consortium members appreciated (Dempsey, 2014). From a legal point of view, since neither Russia nor Turkey is a member of the EU, they are therefore not bound by Third Energy Package rules, which makes the eventual construction of TurkStream much easier (Gurbanov, 2015).

3.2.3.7. Turkey – Qatar Pipeline

The construction of a proposed Turkey-Qatar Pipeline essentially dates back to the end of 1990s, as the "Greater Middle East Initiative" took shape. Prior to the September 11, 2001 terror attacks and the U.S. invasion and occupation of Iraq in March 2003, some of the neo-conservatives in the George W. Bush Administration declared that the U.S. policy of appeasement of authoritarian regimes in the Middle East had failed and that the US must move quickly to remove those regimes and establish democracy across the region (Girdner, 2005). Nevertheless, there is a lot of scepticism surrounding whether the Iraq war was launched upon the rationale of the establishment of democracy or not. The Middle East has moved towards more uncertainty in the wake of Iraq War and the Arab world remains further than ever from democratic norms and governance. In the aftermath of September 11 events and the 2003 Iraq war, the U.S. and the EU have come to define terrorism as a common and global security threat. In early 2004,