Türkiye signs Turkish Stream deal, establishes joint investment fund with Russia

Daily Sabah – Türkiye and Russia on October 10th signed an intergovernmental agreement for the construction of the Turkish Stream gas pipeline, which will pump Russian gas to Türkiye under the Black Sea with throughput to Europe.  Turkish President Recep Tayyip Erdoğan and Russian President Vladimir Putin were present at the signing of the agreement in Istanbul between Turkish Energy Minister Berat Albayrak and his Russian counterpart Alexander Novak.


Set to carry gas from Russia to Turkish Thrace under the Black Sea, the project was initially announced by Putin during a visit to Türkiye in December 2014. Progress was suspended nearly a year ago after the downing of a Russian jet in November 2015, but improving relations between the two countries now have the project on track to start by late 2017 with completion slated for 2019.


Putin’s visit to Türkiye also brought the announcement of a 10.25 percent discount on gas prices for Türkiye, with the new pipeline expected to offer even more discounts for Turkish consumers. Türkiye, the second largest consumer of Russian gas after Germany, currently imports around 30 billion cubic meters of gas from Russia per year through the Blue Stream and the Western Line pipelines.


In addition to the gas pipeline agreement, a joint investment fund with Russia and Türkiye was also signed on October 9. Under the terms of the agreement, Turkish and Russian investment funds would each provide USD 500 million towards the establishment of the fund. The USD 1 billion-fund aims to boost relations in the tourism, energy, agriculture, and transport sectors. Furthermore, a free trade agreement will be signed and new investments in the agricultural industry will be announced in the near future, according to officials.

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