Turkey Russia Sign Gas Deal Pledge Closer Ties

ANKARA (Reuters)–Turkey and Russia on Monday signed a multi-billion dollar gas deal during a visit by Russian Prime Minister Viktor Chernomyrdin–in a move towards closer co-operation between the former rivals.

The gas project–signed by Turkish Prime Minister Mesut Yilmaz and Chernomyrdin–is worth around $13.5 billion and is seen as a major step in stemming Turkey’s large energy deficits.

Under the agreement–Russian state-owned gas company Gazprom–will increase gas supplies to Turkey through a new pipeline under the Black Sea and via an existing line across the Balkans. Gas supplies–currently six billion cubic meters (bcm) a year–will gradually rise to 30 bcm by 2010.

The two countries signed further accords on energy sector cooperation–investment incentives and taxation–which Yilmaz said would "open the pages of a new age" in relations between Turkey and Russia.

"We agreed that there was no alternative to developing–in a constructive way–joint relations…between two countries whose fates are linked by history and geography," Yilmaz said in a speech after the signing ceremony.

Chernomyrdin’s visit was overshadowed by Turkey’s effective freeze on relations with the European Union on Sunday in a row over its place in EU enlargement plans.

Political analysts said souring relations with the EU put pressure on Turkey to achieve a positive outcome from the talks with Russia.

"A sound dialogue has been established between Moscow and Ankara which showed that we have shared interests on many subjects," Chernomyrdin said in a speech translated from Russian into Turkish.

"We found to a large extent our views were the same–whether concerning our own countries–or Europe," he said.

Turkey and Russia have been at odds over competing oil pipeline routes for Azerbaijan’s newly developed Caspian Sea crude and Turkish ties with Russia’s rebel Moslem region of Chechnya.

Turkey wants a pipeline to pump Azerbaijan’s oil to its Mediterranean oil terminal at Ceyhan.

Russia wants the crude to flow through its North Caucasus territory to the Black Sea port of Novorossiisk. Turkey complains this would mean more tankers plying the overcrowded shipping lanes of the Bosphorus–posing a threat to Istanbul.

Turkey is also unhappy about Moscow’s deal to supply the Greek Cypriot government with anti-aircraft systems.

Turkey spent the Cold War as a front-line bastion of NATO–ranged against the Soviet Union. Now Russia’sees Ankara as a ready market for its large arms industry.

The Russian delegation with Chernomyrdin–who headed Gazprom before being named premier five years ago–was the highest-level contact between the two nations since the fall of communism six years ago.

Yilmaz said he had accepted an invitation to visit Russia.

Monday’s gas agreement seals a 25-year gas and pipeline contract signed between Gazprom and Turkey’s pipeline concern Botas in April. At the time officials said it would begin from 1998 and was valued at about $13.5 billion.

The gas project involves increasing the capacity of an existing pipeline through Ukraine–Romania and Bulgaria as well as laying a pipeline under the Black Sea.

The "Blue Stream" project envisages a 1,200-km (750-mile) pipeline from the Russian compression station Izobilnoye–100 km (63 miles) east of Krasnodar–to Ankara via a deep sea connection to Samsun on the Turkish coast.

Turkish energy deman’s grow at about 12 percent a year and Turkish officials have for some time been warning of a severe shortfall if no measures are taken.

Gas supplies through the pipeline–to cost up to $3.3 billion–will eventually reach 16 billion cubic meters per year when the project comes on full stream by 2010.


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