Russia and Turkey have signed a bilateral agreement on the development of the TurkStream gas pipeline project. The agreement provides for the construction of two strings of the gas pipeline across the Black Sea and an onshore string for gas transit to Turkey's border with neighbouring countries. In addition, Russia approved a gas price discount mechanism.
The TurkStream submarine gas pipeline project is a proposed gas interconnection delivering Russian gas to western Turkey bypassing Ukraine. It replaces the 63 bcm/year South Stream gas pipeline project that Gazprom cancelled after tensions with the European Union. The capacity of the TurkStream project was halved from 63 bcm/year to 31.5 bcm/year in October 2015 as Gazprom started developing the expansion of its Nord Stream gas pipeline to Germany in the Baltic Sea. The first string of 15.75 bcm/year will be used exclusively for gas supplies to the Turkish market, while the second one will deliver gas to the European market. Turkey expects the first line to be operational in 2019.
The project, as well as the 4,800 MW Akkuyu nuclear power project, were frozen in late 2015 when relations between Russia and Turkey soured after Turkey downed a Russian jet. In July 2016, the two countries resumed discussions on both projects.