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By John Helmer in Moscow

Gazprom, Russia’s leading company, has told Fairplay that reports that Deputy Prime Minister Igor Sechin agreed this week with the Turkish government to reroute the South Stream gas pipeline on to Turkish territory do not mean that Gazprom has decided to lay a land segment of the pipeline in Turkey, and bypass Bulgaria altogether (for the route until this week, see map).

Sechin, who is a well-known rival and critic of Gazprom CEO, Alexey Miller, was reported as agreeing on October 19 with Turkey’s Minister of Economics, Taner Yildiz, to reroute South Stream through Turkish territorial waters, and in exchange, to supply Russian crude oil to a new pipeline across Turkey from the Black Sea port of Samsun to the Aegean Sea port of Ceyhan. According to a Kommersant reporter granted special access to Sechin, the new scheme has been in negotiation with the Turks since Prime Minister Vladimir Putin was in Ankara on August 6. Ahead of Sechin’s arrival to meet Yildiz in Milan on Monday, Russian officials were working out a more ambitious scheme, according to the Kommersant report, which has the dramatic effect of replacing Bulgaria as Russia’s energy transit partner for both oil and gas with Turkey:
http://www.kommersant.ru/doc.aspx?DocsID=1259075

Hours after Sechin announced his Black Sea waters move, embracing his Turkish counterpart Yildiz in the process, Gazprom’s Miller was in Belgrade, Serbia, along with President Dmitry Medevedev, to agree on funding and building the Serbian section of the South Stream project’s northern branch, and also to establish a major gas storage in Serbia. The regular news wires report that Turkey’s President Abdullah Gal had telephoned Medvedev, to inform him of the decision to allow the Russians to survey the Turkish sector of the Black Sea.”The Turkish president said that the Turkish government had taken all the necessary decisions to give permission for geological and explorative work in Turkey’s economic zone of the Black Sea for the South Sea gas pipeline,” Reuters quotes a Kremlin statement as explaining.

The hint in Kommersant, however, that Sechin has moved South Stream away from Bulgaria altogether produced angry press comment in Sofia, the Bulgarian capital, where the government denies it is losing to Turkey both the gas pipeline and the Burgas-Alexandropoulos crude oil pipeline, which Moscow has been backing for more than a decade — until now. Bulgaria’s Minister of Economy, Energy and Tourism Traycho Traykov flew to Moscow for talks today.

Gazprom’s principal spokesman Sergei Kupriyanov refuses to answer questions, adding to the impression that his company’s leadership is in disarray over Sechin’s moves towards Turkey. A Gazprom source told Fairplay Russia has asked Turkey for permission, and received it, to explore the territorial waters of Turkey to find out whether the area is suitable for the pipeline. A southward deviation of the planned route under the Black Sea is being sought by Moscow in order to skirt Ukrainian territorial waters. “If it is suitable”, the Gazprom source said, “then the pipeline may be laid across the Turkish marine territory. Where it goes next – to Turkey or to Bulgaria or elsewhere – is not decided yet.”

The doubt in that last sentence is challenged by the Bulgarians, who claim they have already signed commitments with Putin to lay South Stream across Bulgarian land territory.

Adding to the confusion which Sechin has set in motion, LUKoil, Russia’s second largest oil producer and exporter, says it has no interest in supplying crude oil for the new Samsun to Ceyhan pipeline project, which Sechin has reportedly agreed to. Until now, the Kremlin has refused to countenance proposals for Russian crude to be delivered across Turkey, either for refining in country, or for export at Ceyhan, which is the tanker terminal on the Aegean for a US-backed crude oil pipeline currently delivering Azeri oil from Caspian fields. In 2007, LUKoil had tried, but failed to get Turkish and Russian government agreement for a new refinery at Zonguldak, on Turkey’s Black Sea coast, 400 kilometres to the west of Samsun, where Rosneft confirms the new plan calls for it to offload its crude. A Rosneft spokesman confirms that it has joined in the Sechin oil pipeline proposal, along with the Russian pipeline company Transneft, Eni of Italy (which had originated the project in 2005, when there was no Russian crude to fill it), and the Calik Holding of Turkey.

Sechin, who is chairman of the board at Rosneft, the state owned lead producer in Russia, claimed in Monday’s announcement that LUKoil is interested in the proposed 555-km Samsun-Ceyhan pipeline, which will have a 1.5 million barrels per day capacity. Today’s LUKoil statement to Fairplay is a categorical denial.
Asked if a dramatic change is under way in Russia’s oil and gas pipeline strategy, Moscow maritime analyst Alexei Bezborodov said the situation over oil transportation in the Black Sea has now become too complicated to understand and to express an opinion about.

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