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Russia's new route through Turkey for South Stream gas pipeline projectÌýwill overcome many legal bottlenecksÌýof EU legislation and regulations, expert said.
"EU energy market rules forbidÌýenergy producers from simultaneously owning transmission networks,"ÌýOrestis Omran, a Brussels-based lawyer at the McKenna Long & Aldridge international law firmÌýtold The Anadolu Agency in an recent interview.Ìý
Russian state-owned gas company Gazprom wasÌýbothÌýthe supplierÌýof gas and owner of the South Stream natural gas pipelineÌýto Bulgaria which ultimately wouldÌýreach the European markets.
In addition, EU had otherÌýlegal concerns in South Stream as well.Ìý
"Bulgarian tax regime was more favorable for Gazprom violating prohibition of state aid EU rules," said Omran.
"Market access restrictions, such as intergovernmental agreementsÌýfavoring companies of a certain nationality over others, were not allowed by EU competition law," he added.Ìý
- New route through Turkey
In early December, RussiaÌýscrappedÌýtheÌýSouth StreamÌýproject, andÌýoffered a new gas pipeline route via Black Sea to reach Turkey's northwestern Thrace region. At Turkish-Greek border a hub will also be constructed to transfer gas further in to European markets.
"Turkey is a not an EU member,Ìýand its involvement in the new gas route takesÌýthe relevant intergovernmental agreements, thus certain legal concerns outÌýof the picture," Omran said.Ìý
Omran reminded that with GazpromÌýbeing the supplier,ÌýtheÌýGreek gas operation network will be owned by another firm,Ìýmost probably the Azeri energy company Socar.Ìý
If EUÌýCommission questions the legality of the new project, partial ownership of the onshore pipeline on Turkey by a domestic company can be an option, Omran stated.Ìý
South Stream was also abandoned because it was very expensive, said Omran,Ìýadding "The initial cost of around 16 billion EurosÌýskyrocketed to more thanÌý50 billion Euros."Ìý
"The cost ofÌýa pipeline through Turkey is considerably less,ÌýwhileÌýan important share of the gas flow will be sold to Turkey in good prices. This creates a win-win situation for everyone," he concluded.
By Ovunc Kutlu and E. Gurkan Abay
Anadolu Agency
ovunc.kutlu@aa.com.tr and gurkan.abay@aa.com.tr
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