Erdogan warns Russia risks losing Turkey energy deals over Syria

Turkey's President Recep Tayyip Erdogan reviews an honour guard in Brussels on October 5, 2015 (AFP Photo/Emmanuel Dunand)
Stuart Williams

Istanbul (AFP) - Turkish President Recep Tayyip Erdogan on Thursday warned Russia risked losing a deal to build Turkey's first nuclear power plant and its status as the country's main gas supplier, as a diplomatic row over the Russian intervention in Syria intensified.

Analysts said while the warning laid bare Erdogan's rage over the Russian air bombardment on Syria and violation of Turkey's airspace, breaking Turkish dependence on Kremlin energy supplies was a near impossible task.

Russia is building Turkey's first nuclear power plant in Akkuyu on the shores of the Mediterranean, a controversial $20 billion project aimed at improving energy self-sufficiency.

"Losing Turkey would entail significant losses for Russia," Erdogan was quoted telling reporters by media including the Hurriyet daily on his way to Japan.

"Others can build the Akkuyu plant if the Russians don't," he added.

"Russia has already invested $3 billion in this project. In this case, it's Russia who should act with more prudence."

Energy resource-poor Turkey is also one of the top importers of Russian gas with gas giant Gazprom as the source of over half of Turkey's energy imports.

"We are a number one consumer of Russian natural gas. If necessary, Turkey can take its natural gas from many other different places," Erdogan said.

"We are saddened that Russia is acting in a way that could provoke the loss" of its economic interests in Turkey, he added.

- 'Can't do without Russia' -

Andrew Neff, analyst for CIS and Turkey at IHS energy, said that while Erdogan's comments exposed his frustration with Moscow, Turkey remained hugely dependent on the Kremlin for its energy supplies.

"The reality is that Turkey needs Russian gas imports more than Gazprom needs the Turkish gas market," he told AFP.

"There's no way Turkey can do without Russian gas in the medium term, let alone the short term."

Turkey also imports natural gas from Iran and Azerbaijan and some LNG from Africa.

But even with Azerbaijan's massive Shah Deniz Phase 2 coming onstream from 2018, the additional gas will likely be soaked up by growing demand in Turkey rather than changing the make-up of its gas import mix.

Neff said one more realistic option could be forcing a halt to construction by Russia at the Akkuyu plant to show displeasure and impress the domestic audience ahead of November 1 elections.

"But further delays in the construction will only add to Turkey's energy import bill in the long-run if Akkuyu is not operational by 2020."

- 'I won't call Putin' -

Erdogan has warned Russian President Vladimir Putin he risked losing Turkey as a friend if Moscow continues its actions in neighbouring Syria.

Ankara, a NATO member, is furious over Russia's air campaign in Syria to prop up the regime of President Bashar al-Assad, who Turkey wants to see ousted.

Also Russian warplanes have twice violated Turkish airspace.

Erdogan said Thursday that such was Turkey's anger over the air space incursions he saw no point in holding new telephone talks with Putin.

"Of course we have been offended by what happened. So there is no point calling him under these circumstances," he said.

In Moscow, Kremlin spokesman Dmitry Peskov said Putin was aware of Erdogan's latest remarks but expressed optimism that Moscow-Ankara cooperation could continue.

"We sincerely hope that these relations will continue to develop in line with the plans that were outlined by President Putin and President Erdogan," he said, quoted by the Interfax news agency.

The two countries had been targeting reaching $100 billion in bilateral trade by 2023.

On a visit to Ankara in December 2014, Putin announced that Turkey and Russia would team up to build a new TurkStream pipeline to pump Russian gas to Europe underneath the Black Sea and avoiding Ukraine.

But TurkStream appears to have become a casualty of the latest tensions, with Gazprom on Wednesday saying that the project would be delayed.