Gazprom is reportedly no longer interested in establishing a gas hub in Turkey in line with a proposal floated by President Vladimir Putin in October 2022 to increase Russian gas sales to Europe.

A Bloomberg report last week that Gazprom had decided against the move did not come as a surprise to industry observers.

Russian industry sources told Energy Intelligence one year ago that the talks over the gas hub for sales to Europe were progressing slowly and were not expected to yield a result anytime soon.

When announcing the idea, Putin said that Russia could move the lost volume of transit through the Nord Stream pipelines in the Baltic Sea, damaged in what Moscow saw as a terrorist attack in September 2022, to the Black Sea and “create a major gas hub for Europe in Turkey, if, of course, our partners are interested in seeing this happen.”

The EU, however, has had concerns that the proposed Turkey hub could become a “backdoor” for politically toxic Russian gas. Next week, it is expected to unveil a legislative proposal to ban Russian gas imports by the end of 2027, which might tighten the control over the origin of imported gas, including via Turkey.

But the key reasons behind Gazprom’s exit are understood to be a lack of gas transport infrastructure to increase Russian gas flows via Turkey and disagreements on the pricing mechanisms, industry experts agree.

No Control

Market sources told Energy Intelligence back in early 2023 that Gazprom was seeking control over pricing at the hub, which it saw more like an analog of its Electronic Sales Platform, where it used to sell gas on spot to Europe on top of long-term contracts.

But Turkey has planned a hub around the existing energy exchange in Istanbul, with its Energy Minister Alparslan Bayraktar questioning the idea of setting up a separate gas trading platform as well.

“Turkey never intended to hand over pricing or marketing control, and for Gazprom, that makes the whole project unappealing. Without control, there’s no leverage,” Tatiana Mitrova, research fellow at Columbia University’s Center on Global Energy Policy, tells Energy Intelligence.

“The Turkish gas hub was always a mix of strategic dead-end and tactical irrelevance for Russia,” she said.

Subsea Challenges

Another major hurdle is building new undersea infrastructure to bring additional Russian gas to Turkey amid geopolitical and technical challenges, says independent gas analyst Danila Bochkarev.

Gazprom’s existing Turk Stream pipeline under the Black Sea already operates above its Europe-bound export capacity of 15.75 billion cubic meters.

“To create a meaningful hub, new infrastructure would have been needed: potentially a third deepwater pipeline across the Black Sea and major upgrades onshore,” Mitrova agreed. “But in today’s environment, those are nearly impossible. Sanctions block access to key vessels, compressors, financing and insurance. Add naval risks in the Black Sea, and new construction becomes not just difficult — but geopolitically toxic,” she said.

EU Ban Adds Risks

The EU’s plan to end its reliance on Russian gas doesn’t inherently undermine the Turkish hub idea — gas could be rebranded as “Turkish blend,” avoiding direct Gazprom-EU deals, Bochkarev suggested. However, its impact would be minimal, especially if peace talks between Russia and Ukraine stall, he added.

However, Mitrova said that the EU legislation now demanded full traceability, which eliminates the long-term commercial logic of Russian gas sales at the hub. “Technically, some volumes might sneak through under bilateral deals, but reputational and political risks for buyers would be high. It’s a legal loophole, not a sustainable strategy,” she said.

Gas swaps could work, with Russian gas supplies going to Turkey’s domestic market and Turkey-produced gas being exported to Europe, but “obviously, prices for Russia would be lower in this case,” Mitrova said.

The legally binding phaseout of Russian gas, with no new contracts after 2024 and a full exit in 2027, means the hub “project becomes commercially pointless,” according to Mitrova.

The Turkey hub has never been a real plan. “It was a placeholder to keep options open,” she said.

Peace Talks Factor

The return of the Ukrainian transit looks like a more viable option for Gazprom if the peace negotiations advance, both Mitrova and Bochkarev agree.

Gradual restoration of economic ties with Ukraine, including the gas transit, was included into Russia’s proposed memorandum presented to the Ukrainian delegation during negotiations in Istanbul last week, Russian state news agency Tass has reported.

“If peace talks advance, Gazprom could regain two European routes: via Ukraine and Nord Stream 2’s intact string,” Bochkarev said. Combined with existing Turk Stream flows to Europe, this could restore pipeline exports to 65 Bcm–67 Bcm per year, he estimated. “Among these two routes, Nord Stream is less likely to resume operations. This is due to potential EU sanctions (though not imminent) and the European Commission’s commitment to ending Russian gas imports. Brussels may also prioritize the Ukrainian route to secure transit revenues for Ukraine,” Bochkarev said.

“Reviving other Nord Stream 1 and 2 lines or the Yamal-Europe pipeline may further diminish Gazprom’s interest in the [Turkey] hub,” Bochkarev said.

Mitrova estimated that a potential return of the Ukrainian transit could add 10 Bcm-20 Bcm/yr of exports, while resuming flows via the Nord Stream lines and Yamal-Europe is not possible given the political opposition from Germany and Poland. “Realistically, those pipelines are stranded,” she said.

Turkey Moves On

Turkey will move on with the hub project without Gazprom, Mitrova said. “Ankara has a broader vision: a hub built on diversified supply — Azeri gas, LNG (Total, Qatar), possibly East Med and even Turkmen volumes. Russian gas might remain part of the mix but not the core,” she said.

“Turkey wants full control — operational, regulatory and commercial. The hub will be Turkish, not Gazprom-branded,” she added.

Contract Implications

The Turkey hub concept has been Gazprom’s main bargaining chip, positioned as a “strategic partnership,” in the ongoing talks over new gas contracts, as two key supply deals with state Botas for a combined 21.75 Bcm/yr expire this year, Mitrova said.

“Without it, talks revert to hard-nosed price and volume negotiations,” she said, adding that Turkey is now in a stronger position, as LNG is cheap and supply is diversified.

“Expect shorter tenors, hub-based pricing (TTF or hybrid), and tough negotiating from the Turkish side,” Mitrova said.