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Turk Stream Revisited: Putin’s new gamble

In the immortal words of Boney M: “Oh those Russians!” And, come to that: “Oh those Bulgarians!”. They seem to get everywhere: the latest is that the Long Arm of Sofia has extended to blowing up bridges hundreds of miles away across the Black Sea! That, anyway, is what Russian president Vladimir Putin has been implying recently, in implicating Sofia in a “terrorist act”, namely last weekend’s massive explosion on the Kerch Bridge, a suitably strategic (and expensive) structure that links Crimea with Russia.

A rather implausible and hastily concocted story, you say? Well, yes. But to understand why Mr Putin should have come up with it, you need to understand the full context of what is happening. So here goes. 

Of Bridges and Streams

The fact is that Mr Putin is now losing his ill-judged Ukrainian war. Badly, and on more than one front. Not only are his troops putting in an embarrassingly bad performance on the battlefield. He has also lost his most important weapon of influence against the EU, namely natural gas.

With the Nord Stream-1 pipeline effectively out of operation now – and Nord Stream-2 never brought into play in the first place – there is no hope of a breakthrough on the Northern Front of the Energy War, performed by means of gas supplies to Germany and northern Europe bypassing Ukraine. War is raging, and gas transit through Ukraine itself may also stop permanently, for whatever reasons – whether these are technical, the result of an accident or bombing, or a matter of politics. 

That is the backdrop against which we should interpret not only Mr Putin’s imaginative theories about Bulgarian Bridge Bombers, but also his intervention on Wednesday at this year’s Russian Energy Week in Moscow.

At this august gathering, Mr Putin – aided by his vice prime minister, Aleksandr Novak – unveiled a momentous proposal for Turkish energy minister Fatih Donmez (and his absent master, Turkish president Recep Tayyip Erdogan). This was that Turkey should be transformed into a gas hub by redirecting to it natural gas flows that had been going to Nord Stream. To this end, Mr Novak offered to add new pipes to the Turk Stream system, which makes landfall in the European part of Turkey, presumably equal in capacity to the difference between the 110 billion cubic metres (bcm) of the two lines of Nord Stream and the 48 bcm of all the pipelines that currently connect Russia via the Black Sea to Turkey. In addition, Messrs Putin and Novak proposed the establishment of a European Gas Hub “at the border of Turkey with the EU” – an apparent reference to Bulgaria – where Gazprom could sell its natural gas to European customers.

In short, frustrated on the Northern Front, Tsar Vladimir the Faltering has his eyes on the Southern Front. He’s reverting to his old Turk Stream playbook and views Turkey as the key ally, offering it and its Sultan, Recep the (Sometimes) Magnificent, the role once assigned to Germany and to Kaiserin Angela, Arbiter of Europe. (This after her successor in Berlin, Olaf the Unremarkable, completely slammed the door on any negotiations and turned his back on Russia.) 

It’s not the first time Mr Putin has played this card.

In fact, he’s been obsessed with doing something of the sort for pretty much as long as he’s been in power. It’s a key element in the Great Game that has been afoot for more than two decades, ever since the West (or at least bits thereof) started trying to create a route to bring gas from the Caspian Sea, through Turkey, to Southern and South Eastern Europe. There was the Trans-Anatolian Gas Pipeline (TANAP) and there was the Trans Adriatic Pipeline (TAP). And ever since, Mr Putin has been scheming to put in place alternative Russian gas supply projects aimed at allowing Gazprom to saturate the Turkish market with a lot more gas than its competitors could deliver.

Talking Turkey

Will the latest variant of this gambit work, however? There are a lot of reasons for supposing it might not.

One is that Mr Putin’s proposal to turn Turkey into a European Gas Hub comes too late, for a rather good reason: it already is a hub. Mr Putin’s statement at his meeting with Mr Erdogan in Astana on Thursday (October 13) confirms the impressive discounts on Russian gas Turkey received and the fact that payment had been deferred to 2024. The “trade-off” is in fact a bit one-sided: Ankara receives tangible benefits immediately, while Moscow gets vague promises on future intermediary services and uncertain gains from future sales of Russian gas to the EU – of which Turkey is not a member.

As it is highly questionable that the EU will welcome such transactions, sales of Russian gas might be disguised as Iranian, Azeri and proper gas sales by Turkish companies.

The bottom line is that Turkey has become a monopoly gas transit country for Russia. Which is something that used to given Mr Putin sleepless nights when the monopolist was Ukraine – a country over which he used to have stronger leverage than he had, or could ever aspire to have, over Turkey.

Another reason for doubt is that, two days on, President Erdogan’s reaction to Wednesday’s proposal has been somewhat low-key and non-committal. Agreement in principle at the Astana meeting has been reported – for what that’s worth and whatever it means. But overall it’s still quite unclear what Turkey’s response will be, as it is dependent on third parties.

Yet another reason is that details are important: one long-standing bone of contention when schemes of this sort have been mooted is whether Turkish companies will be allowed to re-sell Gazprom gas. There was no comment on this in either Russian’s remarks. That’s a major point that would need to be settled.

Besides this, issues that aren’t intrinsically linked to Gas Hubs and Grand Strategy may come into play. The understanding reached in Astana might prove to be evasive when talking detail, as agreements with Mr Putin’s are never cast in stone.

Yet another point to bear in mind is a lesson of history: Mr Putin’s efforts in this direction have failed before, because they were based on a miscalculation. President Erdogan soon started to play his own game instead of taking part in that of Mr Putin. That’s why, after the completion of the Blue Stream-1 pipeline – which had a capacity of 16 bcm and took Russian gas under the Black Sea to the Asian part of Turkey – Gazprom abandoned plans for a Blue Stream-2, due to a lack of interest and failure to prevent TANAP and TAP from happening.

Generally, indeed, Mr Erdogan is neither a fool nor a man to be easily led. It will not have escaped his notice that the Kremlin’s new game plan is to draw Turkey into the Russian orbit and use it as an asset in its gas war with the West. Mr Erdogan may have other ideas – and is in an excellent position to give them substance.

Thus, Turkey has well-diversified selection of foreign gas sources entering and passing through its territory, a role that holds water with the EU and the West in general. This is not only a matter of Caspian, Middle Eastern and East Mediterranean gas. There is also the potential – which Turkey has yet to develop, but will soon do so – of liquefied natural gas (LNG) terminals to import gas that could reach Central Europe and Ukraine. Mr Putin and Mr Novak are no longer interested in simply bypassing Ukraine but seek to prevent Gazprom’s competitors from supplying gas via Greece and Turkey to Central and Eastern Europe, including Ukraine, Slovakia, and Moldova.

In addition, Turkey will be producing its own gas from the Sakarya field in the Black Sea in less than two years. And Russian gas could be a competitor for that. 

In geopolitical terms, too, Turkey is not Germany and it is not a member of the EU either. And Mr Erdogan is neither Angela Merkel nor Olaf Scholtz. During the Ukraine war, Turkey has been playing quite cleverly, if precariously, on the edge, balancing between the West and Russia. Arguably, therefore, it has no room to expand beyond its current role and accommodate the role newly assigned to it by Mr Putin, even if Mr Erdogan wished to do so. Which he probably doesn’t, at least to judge by the lengthening periods the Russian President is having to wait before meeting his Turkish counterpart nowadays. In Astana it was 20 minutes, which must worry Mr Putin!

These articles analyses and comments are made possible thanks to your empathy and contributions, which are the only guarantors of independence and objectivity in our work. The Alternatives and Analysis team.

Back to Bulgaria: guilt-edged assets….

Nevertheless, Vladimir Putin is trying to resurrect and further expand on the geostrategic matrix of Turk Stream. For that, however, he will find Bulgaria’s cooperation and subordination indispensable. Mr Putin will also need quite a constellation of circumstances: a GERB government; Rumen Radev as President; Bulgartransgaz as a contractor; a congenial US president in the White House (either Donald Trump or someone very like him); and correspondingly lenient American diplomats in Sofia who will not contest expansion of Turk Stream, in line with their previous line during its construction phase in Bulgaria.

That’s quite a combination, and it’s not guaranteed. But the Russian president has two powerful assets he can use in getting what he wants. First, his intimate knowledge of the Byzantine world of Bulgarian grand corruption, including the most recent scheme involving Lukoil. And second, the vulnerability of the country’s top politicians to blackmail.

And now – which is where we came in – Mr Putin can expand on the guilt complex he spent so much time and effort creating, by deploying the story of Bulgaria’s alleged role in the attack on that Crimean bridge. He needs the Bulgarian authorities and the public in general to lower their guard and allow him to mobilise Russia’s assets in Bulgaria.

The Kremlin had made liberal use of this guilt complex back in 2014, when Mr Putin had insinuated that Bulgaria was to blame for the cancellation of South Stream – the Russian regional pipeline project before Turk Stream – and the then Bulgarian prime minister Boyko Borissov had obligingly gone along with the fiction. In fact, of course, Bulgaria had had nothing to do with the project’s demise (as it has nothing to do with the attack on the Kerch Bridge) which was entirely due to Vladimir Putin’s unfortunate decision to annex Crimea and to the refusal of Italian energy giant ENI to take on more extensive financial exposure than Gazprom, its partner in South Stream, which had suffered sanctions as a result of the annexation.

Shortly afterwards, incidentally, Mr Putin had also guilt-tripped Mr Borissov into ensuring that Bulgaria lost in an arbitration case regarding another failed Russo-Bulgarian project – the Belene Nuclear Power Plant. A rather expensive piece of guilt, that, since the settlement involved Bulgaria paying more than $600 million.

….and Radev to the rescue

So there’s a fairly good historical track record of guilt. And history, in this case, may not be entirely bunk, since there are at least two reasons to suppose that Mr Putin’s plans for Bulgaria might be enjoying something of a tailwind now.

First, there was the recent case, reported in detail by Alternatives & Analyses (A&A), of the Russian LNG cargo. In this, state-owned gas trader Bulgargaz, which had its top management replaced by Radev loyalists cancelled six cargoes of LNG from the US firm Cheniere. Instead it imported Gazprom-sourced LNG from the Portovaya LNG termimal, at the entry point of the Nord Stream subsea section, using Greece’s Mytilineos as intermediary. A&A readers (and Radev-watchers) won’t be surprised to hear that a second LNG tanker is now on its way.

Second, Mr Radev has called for closer cooperation between the gas transmission system operators (TSOs) of Turkey, Romania, Slovakia and Hungary, in order to allow easier transit of natural gas from the Southern Corridor and thus supply gas to Romania, Hungary and Slovakia. It doesn’t take an unduly suspicious mind to surmise that, once in place, such agreements could be used to ship Gazprom gas from Turkey, disguised as Turkish gas.

Desperate times and desperate measures

Overall, however, the embattled Mr Putin must be wishing right now that everything in life were as easy as manipulating a guilty (and well-paid) Bulgarian. It isn’t. The export of natural gas remains vital for the survival of his regime. Many social programmes are already suffering from underfunding, and things are likely to get worse as spending on the war and shrinking energy revenues mean a growing budget shortfall. Recent decisions on “partial mobilisation” and annexation of occupied Ukrainian regions entail further depletion of state coffers. Moreover, sustaining an ever-growing army – and the fact that it’s disproportionately expensive to keep an army fed and supplied in the winter – requires resources that Mr Putin can ill afford. 

That is why gas sales are vital to him. Yet he fails to grasp the new reality: Gazprom has lost Europe. Almost entirely and irreversibly.

One thing that seems clear in recent developments is that Vladimir Putin is following a pre-conceived script, and only pretends to be reacting to events on the Crimean Bridge. Neither Wednesday’s proposal to turn Turkey into a European Energy Hub nor the missile attacks on Ukraine’s energy and civilian infrastructure were improvised moves. On the contrary, they will have required careful and time-consuming planning, which lends credence to suspicions that Russian special services were actively involved in the strike against the Crimean bridge.

In any case, the strategic concepts apparently in operation and Mr Putin’s revisiting of the Turk Stream playbook mean that tumultuous days are ahead for Southeastern Europe generally and for Bulgaria in particular. More intensive psychological warfare and greater assertiveness from the man in the Kremlin are inevitable, as he has apparently yet to realise the consequences of the long-term loss of European energy markets and the limitations of his power. And since he, as Tsar of All the Russians – in his dreams, at least – is beyond reproach, all the guilt and costs arising from his misdeeds will be passed on to ordinary Russians. And ordinary Bulgarians.

Ilian Vassilev

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