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Investing.com -- Gazprom PJSC (OTC:OGZPY), the Russian energy giant, has abandoned its plans to establish a new gas distribution hub in Turkey, thereby losing a potential opportunity to regain some of its lost ground in European markets, according to a Bloomberg report on Tuesday. This decision comes in the wake of the ongoing conflict in Ukraine and the expiration of the gas transit deal through Ukraine in 2024.
With Nord Stream pipelines non-operational, Gazprom (MCX:GAZP) had been considering Turkey, already linked to two major Russian pipelines, as a potential route back into Europe. Europe was once Gazprom’s largest export market, bringing in roughly $8 billion a month in revenue.
However, after months of analysis, Gazprom determined that the plan was not feasible and has reportedly ceased nearly all related activities. The report added that the company had doubts in the feasibility of the project from the very start.
The proposal, which was publicly endorsed by Russian President Vladimir Putin as recently as October, faced considerable obstacles. Turkey does not have sufficient export-pipeline capacity into southern Europe, and the Ankara government was reportedly not willing to allow Gazprom to jointly market the gas, thereby limiting Russian influence over the hub.
Adding to these challenges, the European Union remains committed to its plans to eliminate Russian gas imports by the end of 2027.