The Russian Gazprom has tacitly attacked its plans to create a new natural gas distribution hub in Turkey, ending a possible opportunity to recover European markets, which it has lost after the invasion of Ukraine.

With the Nord Stream pipelines to Germany and the Ukraine transit agreement ending in 2024, Gazprom was considering exploiting Turkey, which was already linked to two large Russian pipelines as an alternative passage to Europe. However, after months of evaluation, the company concluded that the plan is not sustainable and has largely stopped the relevant work, according to sources that are aware of the issue, cited by the Bloomberg agency.

The abandonment of the plan deprives Gazprom a possible way out to restore part of gas exports to Europe, which prior to the war earned about $ 8 billion per month. Some company executives, however, remained from the outset whether the plan for the Turkish hub would work.

Although President Vladimir Putin continued to publicly put forward the proposal until October, the plan has always faced significant challenges. Turkey has no reserve export pipelines to southern Europe, and Ankara was not willing to allow Gazprom to market natural gas jointly, thereby limiting Russian influence on the hub, according to sources. The European Union also proceeds with a proposal to ban imports of Russian gas by the end of 2027.

In October 2022, just a few weeks after the mysterious blasting of the Nord Stream pipelines, Putin first expressed the idea of ​​a natural gas distribution hub in Turkey. As the Kremlin’s energy influence in the area was shrinking rapidly, it presented a plan for Turkey to take some time to flow equivalent to the capacity of the damaged Nord Stream, about 55 billion cubic meters a year. The project would require additional pipelines through the Black Sea, a costly project, but would be “economically viable” and safer than other European routes, the president said.

The idea of ​​the Turkish hub did not come from Gazprom and the idea might come from political circles near the Kremlin, Bloomberg reports. Company executives were initially surprised when they heard Putin publicly promote the plan, according to a source in the news agency. However, the export arm of the energy giant began to work actively on the design.

For some employees of the state Russian company, especially in the Gazprom Export trading, the idea of ​​a Turkish hub seemed like a new beginning and a way to stay active after the loss of much of the company’s international market. The proposal also supported Turkey, which has the ambition to become a regional gas trading center with its own price index.

However, despite Ankara’s interest and Moscow’s assurances in 2022 and 2023 that the negotiations would only take a few months, the project did not go ahead.

As Gazprom was examining the details of the proposal, her interest was reduced. According to initial discussions, Turkey was planning to market the gas that would reach the junction autonomously, with Gazprom operating only as a supplier, people with knowledge of talks reported. The Russian company was not prepared to give such great control to Turkey, they said.

The capacity of Turkish pipelines to EU Member States, such as Greece and Bulgaria, was very limited to manage significant additional quantities, according to sources cited by Bloomberg. This limited capacity of cross -border flows undermined the prospect of creating a full -scale Turkish hub with its own price index.

Last year, in a meeting with Turkish President Recep Tayyip Erdogan, Putin reiterated that the Turkish idea remains on the agenda and would help to create “balanced pricing mechanisms” for Russian gas. However, there were already indications that the ambitions were limited, with the president previously excluding the storage of large quantities of Russian gas in Turkey – a basic condition for a large hub.

Gazprom executives have long ceased to discuss the plan for a Turkish hub, both internally and in meetings with officials in the country, the same sources said.

Turkey’s stance on the plan of the hub has not changed and remains willing to work with Russia on a joint operation on the initiative, a Turkish official said with a knowledge of the issue, who spoke under anonymity due to the private nature of the consultations. However, he acknowledged that the process has long been delayed.

The abandonment of the plan does not affect Gazprom’s current business relations with Turkey, which remains one of the largest Russian gas buyers. However, it shows that Russia, once the largest supplier of gas pipelines in Europe, now has limited options to regain its influence in the area under the current political conditions.