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    Turcas Petrol Chair Aksoy: Turkey Needs to be Regional Power-Broker



Turkey plans to be a major player in the region as it describes itself 'energy hub' for the region

by: Murat

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Turcas Petrol Chair Aksoy: Turkey Needs to be Regional Power-Broker

Turkey is constantly trying to expand energy resources as well as diversification from new sources. Within this context, Turkey plans to be a major player in the region as it describes itself 'energy hub' for the region.

Natural Gas Europe had the pleasure of an interview with Turcas Petrol Chairman Batu Aksoy on natural gas and energy security.

- What are the main difficulties that Turkey may face in the coming years regarding energy security?

Currently, Turkey's natural gas consumption is 46 billion cubic meters, which 98% of this gas imported from gas-rich neighbouring countries.  The largest portion of natural gas imports came from Russian Federation with 60% of natural gas, 20% from Iran and 15% from Azerbaijan. The rest of natural gas (LNG) imported via tankers from Algeria and Qatar. Turkey needs to diversify its gas sources other than these countries.

- Following the political turmoil in Ukraine, the EU and U.S. sanctioned Russia. The main reason for the escalation may be political, but the control of the natural gas supply route is another motive in the engagement between these countries. May I have your comments on Ukraine-Russia relations regarding natural gas issues?

In 2008, Ukraine had problems with Russia for natural gas deliveries to Europe. In those days, Russia started Nord Stream and South Stream gas pipeline projects. Since then Nord Stream Pipeline project came to life, which ship Russian natural gas to Germany through the Baltics. In coming years, the South Stream project will become a reality, which will carry gas to Bulgaria through the Black Sea. Russia will have a 63 BCM/year exporting capacity through these pipelines.

- Do you see any problem ahead for Turkey's natural gas imports regarding increasing tension in Ukraine-Russia?

Turkey's natural gas imports will not be affected from Ukraine-Russia tension. Currently, Turkey imports natural gas from Western Route and Blue Stream, with 14 BCM and 16 BCM per year respectively. Also, Turkish Energy Ministry signed agreement with Russia to increase capacity in Blue Stream to 19 BCM per year from 2016. Turkey will not face any difficulty regarding Ukraine.

- What are the challenges ahead in energy for Turkey in the region?

Turkey's neighbours are the world's largest oil-gas rich countries. As Turkey try to expand its political influence area, Ankara need to study carefully all options, not just Eastern Mediterranean gas resources. Within this context, Iraqi natural gas may create a big advantage for Turkey. Iraq is the third largest country with 3.6 trillion m3 natural gas reserves. But first, the political turmoil and security issues need to be solved in Iraq-regarding clashes between Iraqi forces and Islamic State militants (former ISIL or ISIS). The cost of developing and shipping Iraqi gas will be much lower than Russian alternative, cause of much shorter pipelines. After solving security/political issues, Iraqi natural gas may begin to flow via pipelines to Turkey in 2 years’ time.

The political clashes in Iraq will create a new status-quo in the Middle East, Turkey, Iran and the U.S. will share the joint interests in energy. If Turkey takes strategic steps, there can be new opportunities for Turkish energy companies. Turkey needs to be a power-broker between Iraq and Irbil.

The discovery in Eastern Mediterranean (Leviathan) gas created a big chance for Turkey. Turkey needs to diversify its natural gas resources with new options. The natural gas resources in Eastern Mediterranean can cover alone Turkey's gas needs for 25 years. The 7-10 BCM per year can be shipped to turkey from 540 BCM natural gas field.

For Turcas, we're planning to be a major player in Eastern Mediterranean gas, as we're trying to set-up a consortium to import natural gas from this field. With this new resource, Turkey's imported gas dependant electricity production may rise gradually. Currently, Turkey generates 48% of its electricity via natural gas powered plants, according to Energy Ministry data.

- Do you foresee a timetable regarding Eastern Mediterranean gas?

I cannot say any specific timetable to begin gas imports from Eastern Mediterranean. The project, feasibility and building of natural gas pipelines may last at least 3 years. Within this context, any pipeline from Iraq to Turkey may start in 2 years’ time, while the others may last 3-5 years afterwards.

Turkey needs to expand its natural gas import resources, Ankara need to encourage entrepreneurs to invest in new areas. Turkey will have to use this golden opportunity to increase its power in energy field. Turkey needs to expand its pipeline facilities to maximum level available and diversify resources to carry via pipelines. Ankara will need to try hard to strengthen energy diplomacy throughout the region.

For Turcas, we're looking for natural gas pipeline projects continuously. Turkey's natural gas consumption will rise to 60 BCM in 6-7 years’ time from 46 BCM currently. Turkey needs to liberalize natural gas market. If competition in natural gas sector rise, the final beneficiary will be Turkish customers. 

- Can you comment on TPAO's increasing share in TANAP?

It's a strategic step to increase Turkey's geopolitical power in the region. Trans Anatolian Pipeline or TANAP will deliver Azeri gas via pipeline to Bulgarian border, which can ship gas to European markets.

Murat Tinas