Turkish Stream May Extend to Austria via Balkan Route

World » SOUTHEAST EUROPE | August 19, 2015, Wednesday // 16:35
Bulgaria: Turkish Stream May Extend to Austria via Balkan Route

Greece, Hungary, Macedonia and Serbia may sign a memorandum on the construction of a gas pipeline from Turkey to Austria in the autumn, Vedomosti reported on Wednesday, citing a participant in the project

The foreign ministers of the four countries are expected to meet in September to take a decision on preparations for a feasibility study, an official of Hungarian gas company FGSZ has confirmed to the the Russian newspaper.

An official of Hungary’s foreign ministry said the planned pipeline has been called Tesla and the first meeting of the working group in charge of drafting the project has taken place on 25 June, according to Vedomosti.

The Tesla pipeline will be an extension of the Turkish Stream pipeline proposed by Russia’s Gazprom to carry Russian natural gas to Turkey beneath the Black Sea. A planned gas hub at Turkey’s border with Greece will enable the potential transit of Russian gas to southern and central Europe.

The Tesla pipeline project, with an annual capacity of 27 billion cubic meters (bcm), is expected to be finalized by 2019, if approved by all participants. The pipeline would pass through Greece, Macedonia, Serbia and Hungary to eventually reach the Baumgarten gas hub near Vienna. Its length will be 1,300-1,400 km. Preliminary estimates put its cost at EUR 4-5B, Vedomosti said.

A final investment decision is expected to be made in the first quarter of next year. Construction works are planned to start a year later.

A extension of the pipeline to Italy from Greece might also be built, according to a source close to the Greek side in the negotiations. In this case the capacity of the pipeline on Greek territory should be increased by 15 bcm of gas which Italy would receive through Tesla.

According to a source familiar with the project, the planned investment in Tesla doesn’t include an extension from Greece to Italy. If the Greek section of Tesla has to have capacity to carry 42 bcm (27 bcm + 15 bcm), its estimated cost will be about EUR 2B.  

The Turkish Stream pipeline comprising four lines with a combined annual capacity of 63 bcm has been proposed to run from Russia to Turkey beneath the Black Sea. Out of the 63 billion cubic metres, Turkey is to take about 14 billion cubic metres while the remainder is proposed to be transited to a gas hub, to be built on Turkey’s border with Greece, for exports to Europe.

Turkish Stream was launched as a substitute to the Gazprom-led South Stream pipeline project which Moscow cancelled in December 2014 over objections from the European Commission.

Turkish Minister Taner Yildiz on Wednesday told reports he has sent a draft agreement on Turkish Stream to Moscow and is now waiting for a response.

The construction of the first line of Turkish Stream from Russia to Turkey will cost EUR 4.3B, while the price of the four proposed pipes will be EUR 11.4B, according to Gazprom estimates.

Gazprom has declined to comment on plans for the construction of the Tesla pipleine, Vedomosti said.

If and when Turkish Stream starts functioning bringing Russian gas to Turkey, Tesla will face competition from the Eastring gas pipeline project, Vedomosti said.  

Eastring has been proposed as an extension to Turkish Stream to Slovakia via Bulgaria and Romania. In early June, Slovakia's Prime Minister Robert Fico proposed to connect Eastring to Turkish Stream and Russian Prime Minister Dmitry Medvedev promised to study the proposal, Vedomosti said.






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Tags: South stream, Turkish Stream, Eastring, Slovakia, Romania, Bulgaria, turkey, greece, macedonia, Austria, Hungary, Tesla, Vedomosti, Gazprom, gas
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