Energy Minister: Door open for flow of Turkmen gas through TANAP
There is also room for
Turkmen natural gas in the Trans-Anatolian gas pipeline (
TANAP) project, which Turkey and Azerbaijan have agreed to build to carry gas from the latter to Europe via Turkey, Turkey's top energy official has affirmed once again.
Taking into account that one day,
after Turkmenistan and Azerbaijan manage to resolve their differences over the status of the Caspian Sea, Turkmen natural gas may also be included in the project, an article was inked as part of the TANAP agreement last year prescribing that Azerbaijan would agree to allow gas
from external sources to flow across its territory via the pipelines.
“This is, of course, an article included in consideration of our Turkmen brothers,” Energy Minister Taner Yıldız told Today's Zaman in an exclusive interview at the ministry last week. Both Azerbaijan and Turkmenistan lay claim to some of the field on the border between the Azerbaijani and Turkmen sections of the Caspian Sea, and have been unsuccessful in reaching an agreement over their shares of the Caspian.
Turkish Prime Minister Recep Tayyip Erdoğan had previously, at the signing ceremony in İstanbul of the TANAP deal, hinted, “Additionally, gas from the
other side of the Caspian could be directed to the TANAP pipe, transiting Azerbaijan.”
Yıldız said the disagreement over the status of the Caspian Sea a major hurdle in cooperation in the field of energy regionally. “
As it is, there are no winners -- only losers. There will many winners when the status of the Caspian becomes clear.” Treating the issue as a commercial one, Turkey is also positive about the possibility of Turkmen gas being transported to Turkey via Iran. “
We don't find it correct that cooperation [in this area] be restrained on account of political considerations,” Yıldız commented.
TANAP is a major project for Turkey which, with its energy needs rapidly growing, aims to become
an energy hub, a passageway to Europe for Caucasian and Middle Eastern energy resources. The state-owned Turkish Pipeline Corporation (BOTAŞ
has a 20 percent share in the pipeline, and the State Oil Company of Azerbaijan Republic (SOCAR) an 80 percent share. The pipeline is set to be completed by 2018 with an estimated construction cost of $7 billion.
The initial capacity of the pipeline is expected to reach 16 billion cubic meters (bcm) per year, of which about 6 bcm will be allocated to Turkey, while the rest will be transported to Europe. It's estimated that the capacity of the pipeline will be
increased to 31 billion cubic meters by 2026.
Turkey's rapidly increasing energy needs
With its fast-growing economy, Turkey's energy needs have been increasing rapidly. The number of cars on the road in Turkey stood at 8 million 10 years ago, while the figure is now 17 million. In 2012, the country spent around $60 billion on energy -- equal to one-fourth of all the money Turkey paid for imports -- and that amount may well increase to $70 billion this year.
In parallel with its growing energy needs, Turkey's installed capacity in electricity has grown by 4,150 megawatts in the last year, which is about the same as Slovakia's total capacity in electricity production. The country is set to overtake Britain as Europe's third-biggest electricity consumer within a decade. “It requires a great deal of attention to manage this change, while the country is growing fast,” Yıldız commented, noting that Turkey is not one of those countries with a stabilized growth rate of around 1 percent or less.
While trying on the one hand to diversify its supplies, Turkey has also been making efforts to develop various projects with countries other than its major partners in energy, such as
Colombia, Venezuela and Qatar. At the moment, Turkey buys natural gas from Russia, Iran and Azerbaijan and liquefied natural gas (LNG) from Nigeria and Algeria under long-term contracts. Turkey is now seeking to buy an additional 6 bcm of LNG, including some from Qatar, under long-term contracts. “We would also like to buy from Qatar, when we come to agreement on the price,” the minister stated.
Turkey currently generates approximately
47 percent of its annual electricity from power plants using natural gas. Natural gas imports, mainly from Russia, Iran and Azerbaijan, meet around 45 percent of Turkey's demand for heat and power, according to the International Energy Agency (IEA). International energy reports indicate that,
by the year 2050, the world will still be obtaining half its all energy needs from oil and natural gas, while coal will account for about 25 percent.
Turkey looking to increase number of thermal power plants
As part of efforts to reduce dependence on foreign sources, Turkey is moving to increase its number of thermal power plants running on coal. Ankara signed, at the beginning of the year, a $12 billion deal with the Abu Dhabi National Energy Company to mine lignite coal and build new power plants capable of producing up to
8,000 megawatts (MW) of energy by 2020. The United Arab Emirates is to build coal-powered thermal power plants and is expected to invest at least $5 billion for the project.
For Minister Yıldız, the size of these investments cannot be explained only by the trust foreign investors have in the energy sector in Turkey. “The size of an industry is never any more important than
the political stability a country enjoys. That's why we are now reaping the fruits of political stability,” commented Yıldız.
In addition to the plant to be constructed by the UAE company in Kahramanmaraş province,
many other new investments are to come for power plants using coal, of which Turkey is estimated to have as much as
13 billion tons in reserves. The Energy Ministry is putting plans for coal-powered power plants out to bid almost every other month, and it shouldn't be surprising if Turkey attains by the 100th anniversary of the foundation of the Turkish Republic, in 2023, an installed capacity of
up to 17,000 to 18,000 MW in this category. The minister is not concerned about pollution, which is usually linked to the use of coal. “The plants to be constructed will have clean technologies. We want to do business in concert with the environment, not against it,” Yıldız said.
Oil production increased by 27 million tons
Having stepped up efforts to meet its needs from domestic sources as much as possible, Turkey has over the last decade increased
the total amount of money allocated for searching for oil and natural gas 13.5 times, while its production of oil has increased by 27 million tons in the same period.
The minister sincerely believes the country has more oil reserves than currently discovered. In 2012, the Turkish Petroleum Corporation (TPAO)
drilled 57 wells and struck oil in one-third of them. The wells generally have low-production capacities, but if it weren't for the increase achieved in the last 10 years, Turkey would have had to pay $35 billion more for oil in the last 10 years than it did.
Quite recently, the TPAO and one of the world's leading energy firms, Shell, concluded a deal to explore for gas and oil in the western region of the Black Sea. Yıldız also expressed hope that the deep-water exploration being carried out in cooperation with the same company off Turkey's Mediterranean coast may prove fruitful.
To be able to conduct exploration activities in a more capable way in seas surrounding Turkey, the country recently bought
a seismic research vessel which can carry out two and three-dimensional seismic surveys. For the vessel, named Barbaros Hayrettin Paşa after the renowned 16th-century fleet admiral of the Ottoman navy, Turkey paid $130 million. It is setting sail this week for research in the Black Sea.
Shale gas has also been in Turkey's focus for some time. In a joint project with Shell, TPAO has been drilling exploratory wells in Diyarbakır province, and now Turkey is intensifying its search for shale gas in Central Anatolia, where TPAO has recently found traces of shale gas in Ankara, Kırşehir and Konya.
Turkey opposes inclusion of gas in Iran sanctions
Turkey, which gets one-fifth of its yearly consumption of natural gas from Iran, doesn't accept that natural gas be included as a part of sanctions against Iran. “We would consider sanctions on natural gas against Iran as if they were imposed against ourselves,” Energy Minister Taner Yıldız has said.
“We can't treat [Iran] the same way that European countries do,” the minister told Today's Zaman, noting that Turkey is the only member country of the Organization for Economic Cooperation and Development (OECD) that shares a border with Iran.
In terms of natural gas, Turkey is almost totally dependent -- at 97 percent -- on foreign sources. The country's annual energy consumption in gas, which is about 50 bcm, is rapidly increasing, with natural gas consumption having risen by around 4 bcm last year, a figure that matches the total consumption of several of the smaller Balkan states. “In terms of natural gas needs, [it's as if] a country is being added to Turkey every year,” the minister said.
The country has been making efforts to
further diversify its sources of natural gas, but finding long-standing and cost-effective sources of gas is not as easy as in the case of oil. “
Those who suggest that natural gas also be included in the embargo against Iran should also show the way to a new solution, but nobody has come up with a proposal,” the minister complained.
Though good partners in energy, Turkey and Iran have had disagreements over price. Turkey took twice the issue of “high prices” to an international arbitration body, and won the first case, with Iran having paid $735 million to Turkey in the past.
France stands little chance at nuclear unless ‘political burdens' cleared
In an effort to diversify and localize its energy sources,
Turkey has also been looking into nuclear energy, for which France is, with seemingly little chance, one of the candidates in Turkey's second tender.
“
It's not possible for the energy sector to carry the political burden of France,” Turkey's energy minister has said in an interview to Today's Zaman. Minister Taner Yıldız noted that it's those who govern a country that need to clear away the burdens on bilateral relations. “Unless political burdens are done away with, we, as the energy sector, can't act as if those burdens don't exist,” Yıldız said, underlining the link a country's energy policy and political stances.
Turkey's first nuclear reactor is to be built by the Russian Federation, while for the construction of a
second nuclear reactor, a tough competition is ongoing. Bilateral relations between Turkey and France went on a somewhat sour note in recent years, as France's previous president, Nicolas Sarkozy, adopted a negative attitude towards Turkey not only as regards Turkey's membership bid in the European Union but also by siding with Armenia concerning claims of genocide against the Ottoman Empire. “The political discourse [of France in regards to Turkey] must definitely be reviewed, and some steps taken,” the minister said, for cooperation in energy to be possible between the two countries.
'Iran also got oil from Kurds'
The Iraqi central government protested strongly when the Kurdistan Regional Government (KRG) started exporting oil by truck to Turkey, but Energy Minister Taner Yıldız has maintained that it's not only Turkey which got oil from the KRG by trucks, and that the government of Prime Minister Nouri al-Maliki is not coherent in its attitude.
“Until recently, trucks were transporting oil to Iran [from the Iraqi Kurdish region]. Why didn't Maliki protest then, but protests now when it's Turkey which is getting the oil?” the minister demanded to know. He also maintained that Maliki even encouraged the deal when it was Iran that was receiving the oil.
The minister finds it hard to understand why Turkey's presence in the energy field in Iraq's Kurdish region should ever be seen as troubling when there are already 39 energy firms from 19 countries doing business there. Yıldız affirmed that Turkey wouldn't act in violation of the Iraqi constitution, but he also made it clear that Iraq is a valuable partner for Turkey in energy. “We can't remain indifferent to Iraq, which is right next to Turkey,”
the minister said. Urging the Maliki government and the KRG to resolve the differences between themselves, he commented, “We don't want to be part of a problem [in Iraq].”
The Iraqi central government has been at odds with Turkey, which it accuses of having engaged, without the consent of the central government, in oil and gas deals with the autonomous KRG. But the Turkish energy minister doesn't agree with the perception that Turkey and Iraq are on bad terms, noting that Turkey, despite having recently been excluded by the Maliki government from an oil project in the south of the country, is still a partner, with a share of nearly $5.5 billion, in oil projects worth $25 billion in southern Iraq, while the contract Turkey was left out of was worth only $236 million.
Poor diplomatic climate freezes Turkish-Israeli relations
There have recently been reports in the Turkish media that Israel was willing to transport the natural gas it discovered in the Mediterranean to Europe via Turkey, a proposal that received a cold shoulder from Turkey.
Elaborating on the political relations between the two countries, which were frozen after Israel's raid on a Gaza flotilla that killed nine Turks in 2010, Turkey's energy minister said: “The climate is very bad. Those who ruined the weather need to put it right again.”
Greek Cypriots have also struck natural gas in the Mediterranean, but Turkey maintains that the gas found belongs also to Turkish Cypriots, and that any unilateral steps taken by the Greek Cypriots regarding the finding are against international law. Minister Taner Yıldız said the Greek Cypriots' gas projects “are feasible, but in view of politics, they lose their feasibility,” also adding, “The oil and gas to be extracted needs to be divided amongst all of Cyprus.”
