President Vladimir Putin's plan to turn Turkey into a hub for Russian gas supplies could theoretically allow Moscow to mask its exports with fuel from other sources, but it may not be enough to convince Europeans to buy it, analysts and sources say, Reuters reported.

After explosions, the cause of which is being investigated, damaged Russia's Nord Stream gas pipeline system to Europe via the Baltic Sea bed, Putin in October proposed creating a gas hub in Turkey. Without going into detail, Putin said the hub could be set up in Turkey relatively quickly and predicted that customers in Europe would want to sign contracts.

So far, there has been no public commitment to do so, and analysts say it will take investment as well as time.

"Does Europe need the project, given the determination of the EU countries to forego Russian gas in the nearest future?" asked Alexei Gromov of the Moscow-based Institute for Energy and Finance Foundation. According to him, it would be impossible to change the configuration of gas flows within the EU, because there are no existing connections that could connect to the proposed hub from northwest Europe, where gas used to flow through Nord Stream 1.

However, gas and pipeline capacity is available. Russia's exports to Europe are down 43.4 percent this year, and the capacity of the Turkish Stream pipeline to Turkey is well below its annual capacity of 31.5 billion cubic meters.

Zongqiang Luo, a senior analyst at Rystad Energy, estimated that it would take at least three to four years to build the expensive new infrastructure needed. 

"Even if a new pipeline could be built, then who is going to buy that gas?" he asked.

A source at Gazprom said he believes the hub would facilitate sales. "That will not be Russian gas, but gas from the hub," said the source, who did not want to be named due to the sensitivity of the matter.

A trade source in Europe said China, which overtook Japan to become the world's largest importer of liquefied natural gas (LNG) in 2021, is already reselling Russian LNG that is not marked made in Russia. According to him, buyers in Southern and Eastern Europe might not care where the LNG came from.

Noting that Europe has not imposed an embargo on Russian gas, unlike oil, Alexander Gryaznov, director of S&P Global Ratings, said Europe may be willing to buy from Moscow through intermediaries. "Europe is unlikely to want to enter into direct contracts with the Russian Federation, and buying free volumes on the spot market in Turkey will be politically acceptable," he said, while adding time and money would be needed to set up the hub.

Alexei Grivach of the National Energy Security Fund in Moscow said the hub provides opportunities for trade. "If the hub started to work, huge possibilities would open up for all sorts of swap operations," he said.

Putin and Turkish President Tayyip Erdogan have forged close relations in recent years Turkey has said it is also possible to include the Trans-Anatolian Natural Gas Pipeline (TANAP), which carries Azerbaijani natural gas to the Turkish border, in the proposed hub.

Last month, Turkey and Azerbaijan agreed to double the pipeline's capacity from the current 16 billion cubic meters. Neither Gazprom nor Socar have provided details of the meeting, but this month Russia agreed to supply Azerbaijan with 1 billion cubic meters of gas under a new short-term contract.

According to Luo, the deal raised some concerns in the market about a possible gas swap deal with Russia to export more gas to Europe.

With the Turkish gas hub proposal, Russia returned to the long-standing idea of adding two strings to the existing Turkish Stream pipeline to double its annual capacity to 63 billion cubic meters.

This corresponds exactly to the combined volumes sold by Russia via various routes to Austria, Bulgaria, Hungary, Italy, Serbia, Slovenia and Turkey in 2020, according to Gazprom.

Russia delivers pipeline gas to Europe mainly through Ukraine at a rate of more than 40 million cubic meters per day, less than half the amount it used to sell to the European Union. It also supplies gas to southern Eastern Europe, including Hungary via the Turkish Stream.

The existing Turkish Stream cost $3.2 billion, and the never-launched Nord Stream 2 pipeline across the Baltic Sea required another $11 billion split between Gazprom and its Western partners.

Neither Gazprom nor the Kremlin has provided an estimate of the cost of the Turkish hub idea. Kremlin spokesman Dmitry Peskov declined to comment this week, when asked by Reuters how Azerbaijani gas could be used in the hub.