Streetwise Professor

Surprise, surprise, surprise. The vaunted Russia-Turkey gas pipeline deal is not really a deal. The reason-brace yourself against the shock-is that the two sides can’t come to an agreement over price:

Russia’s plan to build a new $15 billion pipeline to Turkey is at risk of delay because of a fight over gas prices, according to people with knowledge of the matter.

State-run OAO Gazprom and its Turkish counterpart Botas had a six-month period to agree on prices for gas supplies between the two countries, which expired on Monday. The Ankara-based company now has the right to take the matter to international arbitration, three of the people said, asking not to be named because the information is private.

The dispute over prices means there’s no immediate prospect of signing a binding pact for the new pipeline, the second between Russia and Turkey. An agreement could now be delayed until at least October, two more people said, also asking not to be identified.

I was about as surprised about this as I was to see the sun rising in the east this morning.

Remember: Gazprom consummates maybe one percent of the “deals” that it announces. And the deals founder on price. Almost every time.

By the way, this totally demolishes the alleged pipeline deal between Russia and Greece, because the Grecian pipeline was intended to carry gas that Russia had shipped to Turkey on to Europe.

Not that the $2-odd billion pipeline deal would have been more than spit in the ocean of Greece’s debt problem: the Greek government would only realize a fraction of the $2+ billion, many years from now. And as things look now, never.

In other Gazprom news, apparently the company is stiffing Turkmenistan:

Turkmenistan, irked by falling natural gas exports to Russia, hit out at Moscow’s gas export monopoly Gazprom on Wednesday, saying the energy giant had not paid for gas purchased from the Central Asian country so far this year.

“Since the beginning of 2015, OAO Gazprom has not paid for its debts to state concern Turkmengas for the shipped volumes of Turkmen natural gas,” Turkmenistan’s Oil and Gas Ministry said in a statement on its official website (www.oilgas.gov.tm).

Could be worse. Gazprom could have blown up the pipeline.

This suggests that Gazprom is having some major cash flow problems.

And who says there is no good news?