ANKARA, Turkey -- Russia is scrapping the South Stream natural gas pipeline project and may co-operate with Turkey instead on building a gas hub for southern Europe, President Vladimir Putin said Monday.
Putin pointed at the European Union's refusal to give the go-ahead for the multibillion project, saying that has left Moscow no other options. The project would have involved running a pipeline under the Black Sea to Bulgaria and further on to southern Europe.
However, Moscow will boost gas supplies to Turkey across the existing pipeline and later could build a new link and eventually work with Turkey on creating a hub for natural gas supplies on the border with Greece, he said.
The announcement came at a time when Russia-West ties are at their lowest point since the Cold War over Ukraine. The United States and the European Union have slapped economic sanctions on Russia over its annexation of Ukraine's Black Sea peninsula of Crimea and support for a pro-Russian insurgency in eastern Ukraine.
Turkey, a NATO-member which is vying for European Union membership, has however, been keen to increase exports to Russia even though the two nations have striking differences over the crisis in Syria and Ukraine.
Putin and Erdogan, often compared to each other for their authoritarian streak, tried to downplay their differences but divergences on Syria were nevertheless hard to conceal. Russia remains Syrian leader Bashar Assad's closest ally, while Turkey supports Syria's opposition forces and wants to see Assad deposed.
"We are in agreement that the situation in Syria needs to be resolved. We have difficulties on the issue of how this can be done, how it can be resolved," Erdogan said.
"An approach which questions what will happen once Assad is gone is totally wrong," Erdogan said. "We came to this point because of Assad. This shows that he was not successful"
"We have to consider Assad as though he does not exist. It is not possible to reach a solution with Assad," he said.
Putin sought to downplay the differences, said the sides agreed that the situation in Syria "is not normal" and that they did not want "chaos to reign" there.
Turkey also has also been a strong advocate of the Tatar community in the Russia-annexed Crimean Peninsula and has publicly supported Ukraine's territorial integrity. Barred by Russian authorities from Crimea, Tatar leaders who strongly opposed the annexation are feted in Turkey. On a visit just a month after the annexation, Tatar Soviet-era dissident Mustafa Dzhemilev was given Turkey's highest award.
On Monday, Erdogan said he welcomed assurances by Putin that the rights of all Crimean residents, including the Crimean Tatars, would be upheld.
The two countries, who are major trading partners, reaffirmed their determination to increase their two-way trade volume from $33 billion to $100 billion by the 2020s.
Russia provides the bulk of Turkey's gas and is set to build Turkey's first nuclear power plant. Turkish construction firms are active in Russia while millions of Russian tourists travel to Turkey each year.
In a gesture to Putin, Turkey's government on Monday approved an environmental impact report that would help the nuclear project off the ground. Putin for his part announced that Russia had agreed to increase gas shipments to Turkey and would grant it a six per cent price reduction.
"Turkey and Russia don't share the same views on many issues, in particular on Syria ... (but) Turkey will continue to purchase energy from Russia," said Professor Huseyin Bagci of Ankara's Middle East Technical University. "They will put Syria to one side during their discussions."
Putin was welcomed at Erdogan's new mega-palace, which has drawn the ire of Turkish opposition parties, environmentalists and activists who say the 1,000-room complex is too costly and extravagant and went ahead despite a court ruling. Putin is the second foreign dignitary to receive an official welcome at the palace, after Pope Francis who visited on Friday.
On Monday, a Crimean Tatars' solidarity group staged a protest at a park near Turkey's parliament in Ankara to protest Putin's visit. About 50 children from the Caucasus region, including from Chechnya, also demonstrated in Istanbul, the state-run Anadolu Agency reported.
