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Putin’s Gas Problem

Last December, Gazprom and a Turkish pipeline company signed a memorandum of understanding to construct a gas pipeline from Russia to Turkey under the Black Sea. The $12 billion project is likely to reinforce Russia's reputation as an unreliable partner and accelerate Europe's search for alternate sources of supply.

HOUSTON – Russia watchers are rightly focusing on the latest brittle ceasefire in Ukraine, seeking to discern President Vladimir Putin's intentions there. But they would be wise not to overlook another unfolding struggle – one that will have profound long-term consequences for Europe and for Putin's ability to exert pressure on the continent.

Last December, Russian's giant gas firm, Gazprom, and a Turkish pipeline company signed a memorandum of understanding to construct a pipeline from Russia to Turkey under the Black Sea. This new “Turkish Stream" is an alternative to the “South Stream" Black Sea pipeline from Russia to Bulgaria – a project that the Kremlin abandoned in December, in response to the sanctions imposed by the European Union after Russia's invasion of Ukraine and annexation of Crimea.

The South Stream project failed to comply with EU competition and energy directives, and the announcement of the $12 billion Turkish Stream is likely to reinforce Russia's reputation as an unreliable partner, thus accelerating Europe's search for alternate supply sources. Indeed, in risking his most lucrative market, Putin is exhibiting an almost suicidal disregard for the Russian economy – apparently for no other reason than to cement enmity with Ukraine.

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