Erdoğan's Gas: Can Turkey continue to deftly navigate between the interests of the West and russia?
How the outcome of the presidential elections in this country will affect the fate of the gas hub and what role of Ukraine may be
Today, on May 14th, presidential elections are taking place in Turkey, with the main contenders being the incumbent head of state, Recep Tayyip Erdoğan, and the opposition leader, Kemal Kılıçdaroğlu. The outcome of their intense struggle will not only affect the future of the grain agreement, which has allowed Ukraine to maintain the ability to export agricultural products amid the war but also other important sectors.
At stake is the balance of power in regional energy politics: the prospects of the Turkish gas hub and Ukraine as an exclusive transit route for russian gas to Europe.
Mind explains why the gas issue can add tension to the relations between Kyiv and Istanbul and how the situation is unfolding at present.
What political 'baggage' did Erdoğan bring to the current presidential election? Erdoğan has dominated Turkish politics for two decades, thanks to his support among the conservative and religious electorate. However, the power base of the current Turkish president is weakening. Voters are concerned about Turkey's economic problems, accuse Erdoğan's team of corruption and abuses, and are dissatisfied with the government's handling of the earthquake in February.
As of May 13th, a day before the voting, the Politico aggregator of pre-election polls gave Kılıçdaroğlu 50% in the first round and Erdoğan 46%. If no one achieves more than 50%, the second round will take place on May 28th, and here the polling gap within the margin of error is 51% versus 49%.
What was Erdoğan's position in regard to the war in Ukraine? Since the beginning of the war in Ukraine, Erdoğan has been trying to play on the contradictions between russia and the West by selling weapons to Ukraine and expanding trade with russia. In this way, he sought to transform Ankara into a key regional mediator in conflict resolution. On the other hand, despite U.S. objections, he acquired a russian air defence system, and Washington threatened to impose sanctions on Turkish companies for assisting russia in evading Western sanctions.
In an interview with The Wall Street Journal, Kılıçdaroğlu stated that if he wins the race, he will bring Turkey closer to NATO and the EU. "Turkey is a member of the alliance of Western countries and NATO, which putin is well aware of. Turkey must comply with NATO's decisions," Kılıçdaroğlu was quoted by the WSJ.
He also promised to implement Western decisions on sanctions against russia while advocating for the preservation of Turkish supplies to the russian market. This gives grounds to expect that bypassing sanctions through Turkey will become more difficult, if at all possible, and in case of conflicting interests, the country will look not to russia but to the U.S., NATO, and the EU.
How did Erdoğan handle the gas issue? The gas issue became one of the central themes in Erdoğan's election campaign.
On the eve of the voting, voters received bills with a zero payment amount for natural gas. This gift from the president's team became possible because Turkey began supplying gas from its own production at the Sakarya field on the Black Sea shelf in April. According to Wood Mackenzie, due to the first phase of this project, gas production in Turkey will increase almost tenfold by the end of the year. "Turkey’s deepwater Black Sea gas resources are of huge political and strategic importance. Sakarya is commercially attractive too – thanks to the country's competitive gas pricing and fiscal terms," analysts point out.
Erdoğan also placed a bet on a beneficial friendship with moscow. Counting on his victory, putin agreed to defer the $4 billion payment for russian gas to Turkey until next year. In October 2022, shortly after the explosions on the Nord Stream, the kremlin dictator offered Erdoğan the creation of a gas hub in Turkey – a centre for the resale of russian gas to buyers in Europe, which would allow Ankara to strengthen its political and economic influence on the international stage.
Who and why needs the Turkish gas hub? In arguing for the feasibility of the hub, putin noted that the route through the TurkStream pipeline had become the most reliable for transporting gas from russia. "Working directly with European partners is very difficult… It's easier to [work] for us with Turkey because President Erdoğan is a man of his word. It may be difficult to reach agreements, but when we do, we strive to fulfil them. That's the first point. The second is that it's easier for us to control the waters of the Black Sea. It is a completely realistic project, and we will be able to do it quite quickly," he said.
"Europe is thinking about how to secure its energy supply for future winters. Fortunately, Turkey doesn't have this problem. Moreover, I hope that Turkey will become a centre for natural gas supply," Erdoğan responded. He also claimed that the country is "quickly moving towards launching the gas hub and becoming a centre for production, transportation, and trade of natural gas."
The prerequisites for creating the gas hub include access to various sources of it. In this sense, Turkey already has access to pipeline gas from russia and Azerbaijan, LNG tanker supplies, and domestically produced gas. It has allowed Turkey to anticipate annual sales through the hub to reach up to 40 billion cubic metres of gas to third countries.
"We receive about 100 billion cubic metres annually. Out of this volume, we use 55-60 billion cubic metres. We can sell the rest to Europe," explained Turkish Energy Minister Fatih Dönmez. Currently, negotiations are underway with potential buyers in Bulgaria, Romania, North Macedonia, Hungary, Serbia, and Bosnia and Herzegovina.
Ankara also aims to expand the circle of key gas suppliers for the hub. "We are considering cooperation with Iran, Azerbaijan, Iraq, and, in terms of LNG, with the United Arab Emirates, Qatar, and Oman. If necessary, we will also purchase resources from the United States," Dönmez announced. He assured that "representatives of all the countries with whom this issue was discussed expressed readiness to support the project." However, the possibilities of the country's transit infrastructure towards Europe are limited, with available capacities only through the TurkStream and TANAP-TAP gas pipelines.
How will the election results in Turkey affect these plans? In addition to physical constraints, the ambitious plans of Ankara regarding the development of the gas hub may also be influenced by political circumstances. Specifically, the outcome of the presidential elections will determine how thoroughly russia will be involved in the project.
The victory of Kılıçdaroğlu, who leans towards cooperation with NATO, could limit or even block the 'gateway to Europe' for russian gas through Turkey. It also should not be ruled out that Erdoğan, during his new term, will take into account the sentiments of the pro-Western electorate in order to maintain his ratings and attract new supporters.
And how does this 'align' with the sanctions against russia? The International Expert Group, created within the Office of the President, which is developing recommendations for Western partners on strengthening anti-russian sanctions, poses the greatest threat to the initial plans for the creation of the Turkish gas hub, proposed by putin. Specifically, its recent proposals include blocking the operation of the TurkStream pipeline and concentrating russian gas flows to the EU exclusively through Ukraine's territory, turning the Ukrainian gas transit system into an exclusive route for supplying gas from russia to Europe.
"We suggest sanctions that would lead to the suspension of all russia-controlled pipeline routes capable of transporting russian pipeline gas to the European market, except for any flows directed through the Ukrainian GTS, which has sufficient transit capacity. In particular, this measure will put an end to the use of the russian TurkStream for gas supply to the EU. Additionally, we propose sanctions that would prohibit the import of russian LNG to Europe," the Action Plan 2.0 document states, outlining the roadmap for new restrictions on russia in 2023.
If Ukraine's Western allies impose such sanctions, it will create conditions for pressure on Turkey to limit or block the operation of the TurkStream, a Gazprom project built during Erdoğan's time that serves the kremlin's dictatorial interests. At the same time, this shift will enable Ankara to expand the circle of alternative resource suppliers for the gas hub, rather than focusing on friendship with russia.
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