Gazprom has cut in half the planned capacity of its Turkish Stream gas pipeline project, Interfax reported.

“We will certainly pay great attention to the southern direction [of gas flows] in our strategy of diversification of transport routes,” Gazprom CEO Alexey Miller told reporters on Tuesday, according to the Russian news service.

“At present, we can say that the maximum capacity of Turkish Stream can be 32 billion cubic meters (bcm) of gas. […] this is a realistic negotiating position, on which we will work in the nearest future."

In December last year, Gazprom and Turkish gas company Botas signed a memorandum of understanding for the construction of Turkish Stream  - a gas pipeline intended to carry up to 63 bcm of Russian gas a year across the Black Sea to Turkey and a distribution centre at the border with Greece for delivery to the EU.

The new project replaced South Stream – a pipeline designed to carry the same volume of Russian gas to the EU across the Black Sea and via Bulgaria – which Gazprom had to abandon over competition concerns of the European Commission.  

Moscow and Ankara, however, have signed no intergovernmental agreement yet to build Turkish Stream. They are at odds whether the project should kick off with a single branch for gas deliveries to Turkey only, or a second branch should be laid alongside it for deliveries to customers in southeastern Europe.

The original idea was for four pipes with total capacity of 63 bcm a year. Gazprom has estimated the cost of the project at EUR 11.4 B free of VAT.

Turkey is the second largest market for Gazprom after Germany. The Russian energy giant exported to Turkey 27.4 bcm last year. Currently, Russian gas supplies to Turkey are delivered through the Blue Stream pipeline across the Black Sea, bypassing third countries, and the Trans-Balkan pipeline via the territories of Ukraine, Moldova and Bulgaria.