The president of Turkey and the head of the European Commission at a joint press conference after a Turkey-EU summit in Varna, Bulgaria on March 26, 2018

GIS Dossier: How Turkey scored big in the gas pipeline game

  • The false start of the Nabucco gas pipeline project complicated the EU’s plan to diversify Europe’s energy supplies by tapping Caspian gas
  • Turkey and Azerbaijan nearly finished an alternative transit route, but Russia is working to keep its dominance in supplies to Europe
  • The impact of the emerging new order on Europe’s energy security is not clear yet, but Turkey is now more dependent on Russia

GIS Dossiers aim to give our subscribers a quick overview of critical topics, regions or conflicts based on a selection of our experts’ reports since 2011. The following is our third survey devoted to Turkey. The first covered Turkey’s complicated relations with Europe, and the second focused on its ambitions and concerns in the Middle East. This third part centers on its gas pipelines and supplies policies that impact Europe’s energy security as well.

Back in the 1990s, GIS expert Dr. Carole Nakhle noted in one of her reports, American diplomats distributed a car sticker around Central Asia with the slogan “Happiness is multiple pipelines.” It extolled the principle of the diversification of pipelines, she explained, as the best way of minimizing the risks of disruptions to oil and gas supplies and getting rich off transit fees. Ankara has strived to find its path to such happiness.

Turkey sees itself as a bridge between gas-producing and gas-consuming countries and hopes to become a regional energy hub. It lies close to more than 70 percent of worldwide conventional oil and gas reserves in the greater Middle East. The country, Dr. Nakhle wrote in her report, “is expanding its web of oil and gas pipelines and suppliers. Given its geostrategic position – at the intersection of important energy transfer routes – improved connections with producer countries and consumer markets enhance Turkey’s supply security, increase its geopolitical importance as well as its earnings from transit fees. It also has wider implications on Europe.”

Gas supplies from Russia cover nearly 33 percent of Turkey’s energy needs

Turkey emerged as the key transit state for alternative gas supplies from the Caspian Sea region, which the European Union sees as part of the solution for reducing its overdependence on Russian gas – the “Achilles’ heel” of Europe’s energy security. These projects enhance Turkey’s role as a regional power. The EU has learned that Ankara’s energy and foreign policies are interdependent.

Turkey and Russia

Turkey lacks indigenous gas reserves. It relies heavily on imported gas, which accounts for 29 percent of its primary energy consumption and almost 50 percent of electricity generation.

The sources of Turkey’s gas imports, percentage shares of supplier countries
Between 2000 and 2015, Turkey’s gas consumption tripled. Russia remains Turkey’s largest gas supplier, but Ankara aims to reduce the country’s dependence on the fuel (source: macpixxel for GIS)

In recent years, Russia has been Turkey’s second-biggest trade partner, GIS Expert Eka Tkeshelashvili wrote in a 2015 report for GIS, and the energy sector remains the pillar of bilateral economic cooperation. In 2010, the Russian State Atomic Energy Corporation (Rosatom) signed a contract to build a nuclear plant in Turkey worth $20 billion. Gas supplies from Russia cover nearly 33 percent of Turkey’s energy needs, while oil and coal imports form a minor share, 15 and 10 percent respectively.

The Turks are not happy, the expert added, with the terms of the Russian energy supplies: they pay, for example, a much higher price for Russian gas than European nations. Therefore Ankara has been keen to diversify its energy imports and gain negotiating leverage with Russia.

Leaders of the two countries like to talk of a strategic partnership, but that is misleading. In her report on the impact of Russia’s 2014 annexation of Crimea on Turkey, Ms. Tkeshelashvili wrote:

In reality, Turkey has no synergy of geopolitical or security interests with Russia that would make a genuine strategic partnership possible. On the contrary, there are many important foreign policy issues on which Turkey is radically opposed to Russia.

However, since the failed Turkish coup in July 2016 and the subsequent crackdown by Turkish President Recep Tayyip Erdogan, the relationship between Ankara and the EU has been eroding. Russia has taken this opportunity “to deepen energy and security cooperation with Ankara, increasing its leverage and expanding its role in Syria and the Middle East,” GIS Expert Dr. Frank Umbach wrote in his December 2017 report.

The expert continued: “Turkey still hopes to diversify its energy mix by tapping other foreign suppliers and using more coal and renewable energy sources. But its growing rapprochement with Russia has ramifications for Europe and the Middle East.”

Nabucco: the EU’s false start

The planned route of the Nabucco gas pipeline, from Baku through Turkey to Germany and the Czech Republic
Nabucco had political backing from the EU, but the project secured neither gas suppliers for the first stage nor the needed financing (source: macpixxel for GIS)

The saga of the EU’s fluctuating efforts to improve its energy security by diversifying its gas supplies via Turkey has been covered by GIS from the start. The narrative begins in late 2011 with a drama: the beginning of the extended collapse of the Nabucco pipeline project that was supposed to be the backbone of Europe’s so-called Fourth or Southern Gas Corridor, or SGC. (The other three “corridors” connect Europe to Russia, Norway and North Africa.)

Nabucco had very strong backing from the European Commission and many EU member states. Brussels considered it the EU’s crucial pipeline project with strategic dimensions, as it could not only bring Azerbaijani gas to Europe but also gas from Turkmenistan via a Trans-Caspian pipeline, from the Kurdish region of Iraq and even possibly from Iran, which has the second largest conventional gas reserves in the world.

Dr. Umbach emphasized that Nabucco was the only pipeline project in consideration that would have a European consortium firmly in control of the flow of Caspian gas directly to Europe.

TANAP, the game-changer

The locations of the TAP, TANAP, South Caucasus Pipeline and the Trans-Caspian pipeline project
The new Southern Gas Corridor project will ultimately bring gas to Europe from Azerbaijan’s Shah Deniz, but its functioning will depend on conditions and developments outside EU control (source: macpixxel for GIS).

In a series of GIS reports in early 2012, Dr. Umbach chronicled the emergence of a new player in the region’s fiercely fought pipeline game, introduced jointly by Turkey and Azerbaijan. Their joint venture announced at the end of November 2011 by the Turkish energy company BOTAS was named TANAP, or the Trans-Anatolia Gas Pipeline.

The partners planned to lay the pipes between 2012 and 2017, with Azerbaijan carrying up to 80 percent of the construction costs and Turkey meeting 20 percent.

The project had thrown the competition for bringing Azeri gas to Europe into an uncertain phase which the GIS expert described in the first and second installments of his review. Financial and geopolitical interests collided. “Many experts believe the 2,000 kilometer-long TANAP project has killed the 3,900 kilometer-long Nabucco project, which was already over budget,” Mr. Umbach wrote.

The Russian angle

Russia and its state-owned energy giant, Gazprom, added another twist to the drama. Moscow had its project, the South Stream gas pipeline, planned to follow a route parallel to Nabucco with the strategic aim of weakening its chances and protecting the Russian export monopoly of Caspian gas deliveries to Europe.

Two days after the TANAP deal became official in late December 2011, Dr. Umbach noted, Russia signed an energy package with Turkey which opened its way to start the South Stream link to Europe by using Turkey’s Black Sea Exclusive Economic Zone for the route. In return, Russia lowered its price for the annual 6 billion of cubic meters (bcm) gas supplies to Turkey. This sealed the fate of Nabucco, Dr. Umbach asserted. He presciently warned:

In the future, the Western countries of the EU will have highly diversified energy imports, particularly gas, from northern and African countries, and increased LNG imports. But if the Nabucco pipeline is not built, there is the danger of a fragmented energy market in the eastern part of the EU, which will remain highly dependent on Russia’s energy supplies, and its goodwill and monopolistic interests.

In the third part of his series, the expert added another important aspect to his analysis: the role of Turkmenistan, (estimated to have the fourth- largest gas reserves in the world), in the TANAP project. He looked at the obstacles, mainly mounted by Russia, to the proposed Trans-Caspian Pipeline, a link needed to bring Turkmen gas to Europe.

Final route, participants

The decision on the route of the final link of the EU’s Southern Gas Corridor project – the westward addition to TANAP – was announced on June 28, 2013, by the Shah Deniz Consortium (SDC). It ended years of economic and geopolitical competition, tense corporate rivalry and intense debate about the future for European energy supply security, wrote Dr. Umbach in his August 2013 report.

The two pipelines ended the Russian monopoly of supplying Caspian gas to Europe

The SDC had selected the shorter 876-kilometer Trans-Adriatic Pipeline (TAP) to Italy, with its undersea section of 105 kilometers, over the 1,300 kilometer-long Nabucco-West pipeline through Bulgaria, Romania and Hungary to the Baumgarten gas hub in Austria.

According to that report, the European pipeline link with TANAP was planned to receive 16 bcm of natural gas from the Shah Deniz II offshore gas field in Azerbaijan, with six bcm for the Turkish market and 10 bcm for the European market.

The entire Shah Deniz II project and its delivery system to Europe – TANAP and the expansion of the South Caucasus Pipeline (SCP) – was to cost around $40 billion.

Shah Deniz project

  • The undersea gas fields contain 1.2 trillion cubic meters (tcm)
  • The first phase of production, Shah Deniz I, began in 2006
  • The second phase of production, Shah Deniz II, started in mid-2018
  • The Shah Deniz Consortium (SDC) is made up of BP (28.8%), SOCAR (16.7%), Turkish Petroleum Corp (19%), Petronas (15.5%), Lukoil (10%), Iran’s Nico (10%), SGC Upstream(10%)

Weakening the monopoly

At first glance, the economic and strategic relevance of TANAP and TAP, securing only 2 percent of the total European gas demand of around 500 bcm, may seem small, the GIS expert wrote in the same August 2013 report. Russia’s Gazprom exports around 13 times more gas to Europe than TAP. On top of that, Azeri gas, located deep under the Caspian seabed, is expensive to produce and must be transported 4,000 kilometers across land that is vulnerable to geopolitical shifts and terrorist attacks.

The geopolitical importance of the two pipelines cannot be overstated, Mr. Umbach explained, as they ended the Russian monopoly of supplying Caspian gas to Europe. Turkey also has a vital interest in reducing its gas import-dependence on Russia and Iran, he added.

“Turkey and Azerbaijan demonstrated with TANAP how to use commercial and geopolitical skills in achieving the objectives of a strategic energy infrastructure project,” Dr. Umbach pointed out in his follow-up report in September 2013. He continued: “TANAP also highlighted that Azerbaijan is willing to work against Russia’s strategic energy interests without suffering the consequences.”

Turkey made significant strides toward its goal of becoming a regional energy hub, but it was Azerbaijan that put itself in the driver’s seat, as it controlled the TANAP consortium and 80 percent of the European supplies from the Caspian region, the expert concluded.

Russia: from South Stream to TurkStream

This map shows Turkey’s, Russia’s and European countries’ natural gas pipelines in various stages of construction
Like the canceled South Stream, TurkStream offers only route diversification, while competing with the EU’s plan to achieve real supply diversification via the Southern Gas Corridor (map: macpixxel for GIS)

Russia’s South Stream pipeline project was widely perceived as the most controversial, expensive (with the cost estimated at above 50 billion euros) and of dubious commercial value. At the time, Russia’s existing gas pipelines to Europe – including those via Ukraine’s network – provided almost 250 bcm annually, enough delivery capacity without South Stream’s extra volume of 63 bcm.

The South Stream’s value to Moscow was that it avoided Ukraine. The Russians saw a chance to press ahead with their project after the Nabucco-West link to the EU’s SGC was dropped, Dr. Frank Umbach wrote in October 2013. The Russian-backed South Stream alternative could become a fait accompli, the expert warned, before the Trans-Adriatic Pipeline consortium implemented extra supply options for Azerbaijan and other non-Russian gas exports to Southeastern Europe.

The bombshell

On December 1, 2014, Russian President Vladimir Putin dropped a bombshell at a meeting in Ankara with Turkish President Recep Tayyip Erdogan, announcing that the South Stream gas pipeline from Russia to Italy had been canceled. He blamed the EU’s “unconstructive approach” and Bulgaria’s unwillingness to continue construction for the project’s demise. Next, Mr. Putin said Russia and Turkey had signed a memorandum of understanding to build a new Black Sea pipeline with four strands and the same capacity of 63 billion cubic meters per year. It was called Turkish Stream.

The project was described by Dr. Umbach here.

Bulgaria, Hungary, Italy and Austria all backed Turkish Stream, the GIS expert wrote. The Hungarian government hosted a meeting with Serbia, Macedonia, Greece and Turkey to propose a pipeline extension from Greece through Macedonia, Serbia and Hungary to Baumgarten in Austria.

This so-called “Tesla” route coincided with South Stream’s original northern leg, substituting Macedonia for Bulgaria.

The shooting by Turkey of a Russian bomber briefly froze the two countries’ relations

However, Turkish Stream met with instant opposition in the European Commission. Brussels wanted to preserve the EU’s emerging energy ties with Ukraine and had no financial incentive to invest billions in redundant infrastructure to buy the same Russian gas Europe had been receiving through Ukraine. Commission President Jean-Claude Juncker warned that the project could harm Gazprom’s reputation as a supplier and he “will not accept any blackmail” from Moscow.

Dr. Umbach pointed out another problem:

But there seems to be a dawning awareness in Ankara of the costs of Turkey’s growing dependence on Russian gas. Some experts had already remarked last spring that this dependence had become so “total” that it had paralyzed Turkish foreign policy. The Turks also learned that Russia is not a reliable supplier. Flows to Turkey’s most populous Istanbul and Marmara region via the Trans-Balkan pipeline were cut by 20 percent late last year with no explanation, raising the specter of blackouts in the peak winter season. Deliveries returned to normal only when the two sides agreed on the Turkish Stream memorandum.

GIS Founder Prince Michael of Liechtenstein commented that the axing of South Stream cemented Russia’s ties with Turkey and the new proposal was to Turkey’s advantage. “Russia already provides the bulk of Turkey’s gas,” the Prince pointed out. “And during the visit, Mr. Putin offered Turkey – a major trading partner – a 6 percent price discount on Russian gas.”

Sudden freeze

The November 24, 2015 shooting by Turkey of a Russian Su-24 bomber operating from Syria (after it had allegedly violated Turkish airspace) briefly froze the two countries’ relations. Among other measures, Moscow suspended Turkish Stream. In his February 2016 comment, Prince Michael remarked that while “the incident appeared to be the result of an accident and had no military consequences, it triggered a diplomatic crisis so severe as to be nearly inexplicable.”

Something had to give. By late June of 2016, Prince Michael commented on a sudden turn of events:

“Turkey has spent most of the past year backed into a corner. Then, over the past two weeks, three remarkable things happened. On June 26, Israel and Turkey agreed to restore normal diplomatic relations, potentially unlocking the development of huge offshore natural gas fields in the Eastern Mediterranean. The next day, [the] Kremlin … announced that Mr. Erdogan had apologized for the downing of the Russian warplane in a letter to Mr. Putin. … [R]elations began to normalize. … Turkey is now back in the position of a leading regional power in the Eastern Mediterranean.

The diplomatic thaw between Turkey and Israel, and the intricacies involved in the talks on an underwater pipeline from Israel’s Leviathan gas field to Turkey, and possibly Western Europe, are discussed by GIS Expert Ambassador Zvi Mazel here.

Kazakhstan and other possibilities

This map shows the proposed expansion of the EU South Gas Corridor to Kazakhstan’s Tengiz Field
Russia abhors direct Kazakhstan-EU energy cooperation. It has been blocking the proposed Trans-Caspian Pipeline (TCP) which would connect Kazakhstan to the EU’s gas corridor (source: macpixxel for GIS)

In December 2015, the European Union and Kazakhstan signed a new “enhanced partnership and cooperation agreement,” which, among other things, called for greater collaboration on energy issues, wrote Dr. Umbach for GIS in April 2016. The proposed Trans-Caspian Pipeline (TCP), with a capacity of 30 bcm, could connect Kazakhstan and greatly enhance the EU’s Southern Gas Corridor. Turkey, Azerbaijan and Turkmenistan wanted to get the pipeline up and running by 2019.

However, the expert wrote, that could not happen without the EU’s involvement in the project’s financing and security. The EU has a knack, Dr. Umbach explained, for taking stances that raise expectations of its energy partners but does not think through or help manage the consequences – in this case, Moscow’s hostility to the project. The expert noted, “the result is to undermine the EU’s credibility, reputation and geopolitical influence.” By October 2018, Brussels had only promised to help Kazakhstan line up investors.

Since 2016, Mr. Umbach wrote, Russia has taken the opportunity to enhance its energy ties and foreign policy cooperation with Turkey. Ankara, which feared further Kurdish advances in Syria, felt it needed an ally in the conflict across its border and decided to reach out to Moscow.

Russia presses ahead

In October 2017, Turkey cleared Russia’s Gazprom to build the second section of the TurkStream (as Turkish Stream was renamed) gas pipeline through its exclusive economic zone in the Black Sea. Construction of the first pipe started in May 2017. According to recent news reports, gas could flow through TurkStream by late 2019.

If Russia builds all four of the TurkStream pipes it has planned, Dr. Umbach pointed out in the same report, it could undermine Turkey’s ambitions to become an energy hub. The pipeline could create significant bottlenecks inside the Turkish-Greece gas infrastructure system, as 10 bcm of Azeri gas for Europe is transported through the same network.

As a signatory to the 1991 Energy Charter Treaty, Turkey seeks to encourage investment and trade, and ensure reliable transit

At this point, Turkey still has energy diversification options, but all are complicated by various political factors. Dr. Umbach’s December 2017 report details those related to imports from Azerbaijan, Kurdistan, Israel, Cyprus and Iran and the liquefied natural gas (LNG) option.


Russia’s proposals for additional pipelines to distribute TurkStream gas further into Southern and Central Europe
Russia plans to link its TurkStream pipelines to both Southern and Central Europe, bypassing transit through Ukraine (source: macpixxel for GIS)

In his latest (Sept. 11, 2018) account of the never-ending tug-of-war over Europe’s energy, Dr. Umbach analyzed Russia’s possible next steps and the fundamental dilemmas of Turkey’s energy policy. One of Moscow’s options, the GIS expert wrote, was reviving the project of the connecting pipeline from Turkey to Baumgarten, Austria (originally planned as part of the abandoned South Stream pipeline). The proposed line, dubbed “South Stream Lite,” is supported by Bulgaria and Serbia.

Gazprom could also exploit unused capacity in TAP or revive the construction of the Interconnector Turkey-Greece-Italy (ITGI, also known as “Poseidon”) project. The expert pointed out that all these plans were “clearly directed against EU-supported proposals such as the Bulgaria-Romania-Hungary-Austria (BRUA) and Eastring pipelines, which would allow Southeastern Europe to better diversify gas supplies away from Russian sources.”


Despite the growing friction between the European Union and Turkey, Dr. Umbach concluded, Turkey’s President Erdogan and his government still consider the Southern Gas Corridor pipeline network as the country’s most important gas diversification project. Turkey – a centuries-old rival of Russia – remains wary of becoming too dependent on Moscow, he emphasized. Azerbaijan, on the other hand, is Turkey’s only natural gas supplier that has not had a geopolitical conflict or a serious price dispute with Ankara over the last two decades.

As a signatory to the 1991 Energy Charter Treaty, Turkey seeks to encourage investment and trade, as well as ensure reliable transit, he asserted. It has been a dependable reexporter of natural gas to Greece since 2007, he pointed out, despite the countries’ often contentious relationship, covering almost one-third of Greek consumption.

Ankara is unlikely, Dr. Umbach wrote, “to successfully use its transit status as a political instrument against the EU.” The TANAP-TAP pipeline network will only provide the bloc with just a tiny fraction of its gas demand.

If Ankara were to exploit the EU’s growing dependence on Turkey for gas imports, it might only produce some short-term gains for Turkey. Therefore, Turkey may try to balance its growing partnership with Russia by cooperating on the Southern Gas Corridor project, expanding supplies into the TANAP-TAP network with non-Russian gas and maintaining functional but ambivalent cooperation with the EU on energy and foreign policy.

By clicking "I Agree" below, you acknowledge that you accept our Privacy Policy and Terms and Conditions. Feel free to check out our policies anytime for more information.
I agree