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Russia, Turkey plan to sign legally binding deal on Turkish Stream by July

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Russian Energy Minister said that Russia and Turkey have agreed to prepare legally binding documents on the construction of the Turkish Stream pipeline by the end of June.

Gazprom CEO Alexei Miller said in May that the company and Turkey’s Botas had reached preliminary agreements on discounts for Russian gas.

Russia and Turkey have agreed to prepare legally binding documents on the construction of the Turkish Stream pipeline by the end of June, Russian Energy Minister Alexander Novak told RIA Novosti.

“I cannot tell you the exact date when it [agreement] will be signed, it will depend on internal procedures, its passage, ratification, and so on. By the end of June at least a draft of the document will be prepared. Of course, we believe that it should be signed before the start of the construction,” Novak said.

The Turkish Stream is a proposed pipeline from Russia to Turkey across the Black Sea with a planned annual capacity of 63 billion cubic meters of gas. It is expected to become operational in December 2016 and is a substitute for the canceled South Stream pipeline project.

Up to 47 billion cubic meters annually are expected to reach the planned Turkish-Greek gas hub near the Ipsala border checkpoint.

In April, Novak said that the Turkish Stream might be extended to Austria through Greece, Macedonia, Serbia and Hungary.

Moscow and Athens are likely to sign an agreement on the construction of a Turkish Stream pipeline extension on the Greek territory at the upcoming St. Petersburg International Economic Forum (SPIEF), Alexander Novak said.

“Such a project is being prepared and I think that the probability of signing it [at the SPIEF] is high,” Novak said, adding that the details of the document will be revealed after it is signed.

An employee assembles parts at the booth of Russian company Gazprom in preparation of the Hanover industrial fair in Hanover, Germany

The St. Petersburg economic forum, which will be attended by Russian President Vladimir Putin and Greek Prime Minister Alexis Tsipras, will take place on June 18-20.

The Turkish Stream is a proposed pipeline from Russia to Turkey across the Black Sea with a planned annual capacity of 63 billion cubic meters of gas. Up to 47 billion cubic meters are expected to reach the planned Turkish-Greek gas hub near the Ipsala border checkpoint.

The gas price discount that Russia provides to Ukraine could be less than 30 percent in the third and fourth quarters of 2015, Russian Energy Minister said.

“We do not have any kind of fixed figures, such as either $100 or 30%, the provided discount can be lower than 30%,” Novak said, adding that the amount of discount will be determined primarily “on the basis of economic feasibility.”

Kiev currently purchases gas from Russia with a $100-discount per 1,000 cubic meters.

On Tuesday, Alexander Medvedev, Deputy Chairman of Russia’s energy giant Gazprom, said that the price of Russian gas for Ukraine in the third quarter of 2015 would stand at $287.15 per 1,000 cubic meters without the discount.

Resource: Sputnik, June 17, 2015

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