Can Turkey become a 'natural gas hub' for Russia?

RUSSIA ENERGY / FINANCE - In Brief 14 Oct 2022 by Marcel Salikhov

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This week President Vladimir Putin proposed the creation of a "natural gas hub in Turkey for Russian gas. We are skeptical. The expansion of deliveries to Turkey is one of the possible replacements for the European market for Russia. However, the Turkish gas hub will not be able to become a full replacement for Nord Stream 1 and Nordstream. At least not in the short term. The capacity of the Turkish Stream is 32 bcm/year. In 2021, flows through it amounted to 22 bcm. Thus, even 100% capacity utilization, which is unrealizable, means an additional increase in pumping to Turkey by 10 bcm/year. Another route (Blue Stream) is also almost fully used (17 bcm/year capacity). The total capacity of NS1 and NS2 is 110 bcm/year. Some of the Russian spare capacity in upstream and transportation aimed for NS1 and NS2 can be “switched” to Turkey. But it's only some of it. Russian gas deliveries through Turkey to Southern Europe are also limited by the capacity of the Balkan Stream (currently 16 bcm/year), which is also currently used by 70-80%. As part of the South Stream project (predecessor of the Turkish Stream), Gazprom assumed that the total capacity of the pipeline for the supply of Russian gas under the Black Sea would be 63 bcm/year. Thus, Russia already has a transport reserve (at least on its own territory) for doubling supplies along the southern corridor. But another pipeline through Black See is needed to transport it to Turkey. And there are several critical questions. First, NS1 and Turk/BalkanStream have different markets in the EU. There are no large gas transmission bridges between North-Western and Southern Europe. Will there be enough demand in Turkey and Souther...