Turkey and Russia Discuss Gas Discount

Gazprom Russian Energy Company and Botas Turkish State Petroleum Pipeline Corporation are expected to conclude negotiations on the discount the Russian gas giant is prepared to give the Turkish company by the middle of July, reports Reuters.

Earlier it was reported that Gazprom had agreed to give a 10.25% discount on gas to Botas, and the agreement was to be signed before the end of June. Around the same period, the Russian Federation and Turkey were expected to sign an intergovernmental agreement about the Turkish Stream pipeline project.

Bloomberg agency reported that Gazprom and Botas were still unable to agree on a discount, which affects the timing of the intergovernmental agreement between Russia and Turkey about the Turkish Stream and defers its implementation. Gazprom denied the direct link between Turkish Stream and gas discounts for Turkey.

Gazprom and Botas agreed, on December 1, 2014, to build a gas pipeline across the Black Sea with a capacity of 63 billion cubic meters of gas per year after the European Union blocked a similar project in Bulgaria due to the conflict in Ukraine.

Alexander Novak, Minister of Energy of Russia, declared that the EU would have to agree on a new route. Russia claims that the Turkish project will allow Gazprom, which supplies about 30% of the EU’s gas needs, to supply gas by bypassing Ukraine.

Gazprom did not plan to renew its contract with Ukraine for the transit of gas beyond 2019. However, last week it was revealed that President Vladimir Putin had instructed Alexey Miller, Deputy Chairman of the Board of Directors of Gazprom, to negotiate with Ukraine before the expiry of the transit contract.