Russia and Turkey battle over pipeline: reports

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Russia and Turkey have locked horns over Moscow's South Stream gas pipeline project as Ankara is putting off its approval of the route to bargain for lower gas prices, reports said Thursday.

The pipeline project to pump gas through the Balkans and onto other European countries was announced in 2007 and is seen as a rival to the European Nabucco project which will bypass Russia.

But Turkey's Prime Minister Recep Tayyip Erdogan made minimal public remarks on the South Stream pipeline during his visit to Russia this week, saying merely that "joint work is continuing."

However the issue was hotly debated behind closed doors and is becoming a point of contention between the two countries, according to Russian media.

Ankara is looking to use the pipeline issue, championed by Prime Minister Vladimir Putin, to pressure Moscow to lower its price of gas, online newspaper said Thursday.

The pipeline would go through Turkey's territorial waters but Ankara has yet to give its approval for construction though it initially promised to give the green light last December.

Recent statements have raised questions about Russia's faith in the project, with Putin ordering energy minister Sergei Shmatko last week to consider building an liquefied natural gas plant on the Black Sea.

"Right now Gazprom and the government are looking at various ways to minimize expenses in realizing the South Stream project," Deputy Prime Minister Igor Sechin, who oversees the energy sector, told Kommersant Thursday.

"The possibility of building a gas liquifying plant on the Black Sea can be an addition or one of the alternatives to the pipeline," he said. "Though the LNG plant could also be built in the Russian north for Yamal gas."

Announcements of a possible LNG plant is merely a bluff on Russia's part as Turkey is delaying its approval of South Stream in order to apply pressure on Moscow, analysts said.

"It's a bluff meant for Turkey's ears," said Mikhail Krutikhin of RusEnergy.

"Russia cannot cancel South Stream since it would be a major blow to the prime minister's image and all the agreements signed with Eastern Europe," he told Kommersant.

© 2011 AFP

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