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Energy On Agenda As Turkish Leader Visits Russia

Turkish Prime Minister Recep Tayyip Erdogan is expected to hold talks with Russian Prime Minister Vladimir Putin during a two-day visit to Moscow.

ANKARA (Reuters) -- Turkish Prime Minister Recep Tayyip Erdogan's trip to Russia to pursue gas deals is expected to boost EU membership candidate Turkey's quest to become a key transit hub for Europe, but highlights a difficult east-west balancing game for Ankara.

Once Cold War foes, NATO member Turkey and Russia have in recent years deepened their ties by signing a raft of agreements from gas and oil pipelines to nuclear power plants, and have sought closer security cooperation in the Caucasus region.

Erdogan was due to start on January 12 a two-day visit to Moscow, where he was expected to meet with Russian Prime Minister Vladimir Putin for talks focusing on energy and security.

Analysts said Turkey's overtures to Russia are a reflection of Ankara's ambitions to wield greater political clout in the region, pressing its influence and contacts to the east, from the Middle East to Russia and Central Asia.

"Turkey has turned its Ottoman-era anxieties towards Russia into a remarkable relationship with a very strong commercial and energy dimension," said Ian Lesser, an analyst at the German Marshall Fund in Washington.

"But it also raises long-term questions about the difficult choices and pressures Turkey might face if the West's relationship with Russia becomes more competitive. It's a complicated game and leaves Turkey very exposed," Lesser said.

Last year, Putin won Ankara's approval for the South Stream pipeline, a Moscow-backed gas pipeline to cross Turkish waters to Europe which is seen as a competitor to the European Union-backed Nabucco project.

Russia may also be looking to gain a stake of as much as 50 percent in a Turkish oil pipeline to be built by Italy's ENI and Turkey's Calik, which will join the Black Sea port of Samsun and Ceyhan in the Mediterranean. Russia has agreed to provide some of the oil for the pipeline.

Turkey, which is using the energy card to promote its membership of the EU, has insisted that South Stream and Nabucco are not rivals, but complementary.

Analysts say a Turkey-Russia alliance is one of convenience.

Russia is Turkey's biggest single trading partner and provides two-thirds of its gas. The two countries have bilateral trade ties of some $40 billion.

Underlying the importance Ankara attaches to the visit, Erdogan will lead a delegation that will include Foreign Minister Ahmet Davutoglu, Energy Minister Taner Yildiz and Foreign Trade Minister Zafer Caglayan in talks expected also to touch on trade, investments, regional and international issues.

Russia is keen to have South Stream built ahead of the rival EU-backed Nabucco gas pipeline, which is aimed at cutting Europe's reliance on Russian gas.

Russia, which supplies a quarter of Europe's natural gas, wants to build gas supply routes quickly to bypass Ukraine and other ex-Soviet states after disputes with Kiev over transit payments in recent years disrupted flows.

A senior Turkish Energy Ministry official told Reuters the two sides would discuss the next step in building a second leg of Blue Stream, a natural gas pipeline that runs from Russia to Turkey under the Black Sea. He said Turkey and Russia may also discuss raising the capacity of the current Blue Stream pipeline and extending it to Israel.

A test of Turkey's alliance with Russia came during the Russia-Georgia war of 2008. Turkey, which neighbors Georgia, was at pains not to be seen as criticizing Moscow over the war.

Erdogan is also expected to discuss peace in the southern Caucasus region where Russia and Turkey share energy security concerns. Instability there could also have implications for the northern Caucasus where Russia is fighting Islamist insurgents.

Turkey and Armenia, a former Soviet republic, last year agreed to establish diplomatic relations and reopen their frontier, overcoming a century of hostility stemming from the World War One mass killings of Armenians by Ottoman Turks.

But Turkey, faced with a backlash from Muslim ally Azerbaijan, has said it will only ratify the accords if Armenia gives ground in talks over the province of Nagorno-Karabakh.

Armenia and Azerbaijan are still technically at war over the mountainous region of Nagorno-Karabakh, where ethnic Armenians backed by Christian Armenia broke away from Muslim Azerbaijan in a war that cost more than 30,000 lives.

Years of diplomacy by Russia, the United States and France have failed to get the two sides to sign a peace deal. Mediators late last year reported progress between Azeri President Ilham Aliyev and his Armenian counterpart Serzh Sarksian.

Russia is one of the three main international mediators in the peace talks, which are led by the Organization for Security and Cooperation in Europe's (OSCE) Minsk group.