The discovery of another natural gas reserve in the waters of the Black Sea, record-high renewable installations and output, the ratification of the Paris climate accord, and accelerated gas supply security efforts amid the global energy crisis marked 2021 for Turkey’s energy sector.
The year yielded another successful search for hydrocarbon in the Black Sea as Turkey in early June announced the discovery of another 135 billion cubic meters (bcm) of natural gas.
The announcement followed one in 2020, when 405 bcm of gas reserves were found in the Black Sea, the country’s largest-ever gas find and the biggest offshore discovery worldwide that year.
The find took the total gas reserves discovered by the country in the Black Sea to 540 bcm, a volume that is projected to help the energy-dependent country cover its needs in the years to come.
The government says it plans to extract and start using the gas from the Sakarya gas field as of 2023, the centennial of the founding of modern Turkey, in a bid to decrease its dependence on energy imports from Russia, Iran and Azerbaijan.
It aims to start pumping the gas to the national grid with sustained plateau production starting in 2027-2028. The first phase is expected to see some 10 million cubic meters (mcm) of gas being delivered per day.
According to Energy and Natural Resources Minister Fatih Dönmez, the country also plans to start new exploratory drilling in the Black Sea waters in early 2022. Turkish drilling ships conducted operations in several wells in 2021, with many more expected in 2022.
Head of Turkey's Energy Market Regulatory Authority (EPDK) Mustafa Yılmaz in June said the country's gas discovery with a market value over $100 billion (TL 1.33 trillion) would be open for trading under the name "Black Sea Gas Contract" in Turkey's gas futures market, which was launched on Oct. 1 in Istanbul.
Turkey has already initiated production of the pipes that will comprise a pipeline beneath the Black Sea to bring the gas onshore. The seabed pipeline stretching around 169 kilometers (105 miles) is scheduled to be constructed in 2022 to connect the wells in the region to the main grid.
In this framework, the state energy company Turkish Petroleum Corporation (TPAO) awarded a consortium comprised of Subsea 7 and Schlumberger a major contract worth over $750 million for the Sakarya gas field development on Oct. 15.
The engineering, procurement, construction, and installation (EPCI) contract will cover the subsurface solutions to onshore production, including completions, subsea production systems (SPS), subsea umbilicals, risers and flowlines (SURF) and an early production facility (EPF).
On Nov. 16, Italian multinational oilfield services company Saipem also revealed it was awarded two new offshore contracts for transportation and installation activities for the field worth over $600 million.
Dönmez confirmed on Nov. 22 that engineering works at the field had been completed and that the first subsea pipes would be laid next spring.
On Nov. 26, TPAO appointed Wood, the global consulting and engineering company, as the integrated project management partner for the field development project.
On Nov. 17, the country added a fourth drillship to its fleet of vessels that include Fatih, Yavuz and Kanuni. The new 238-meter-long and 42-meter-wide (780-feet-long and 138-feet-wide) ship weighs 68,000 gross tons and has a maximum drilling depth of 12,200 meters (40,000 feet).
Dönmez said exploratory work would accelerate in the first quarter of 2022 with the Fatih drillship scheduled to drill one more natural gas exploration well.
He confirmed that the new drillship, which is capable of operating in harsh sea conditions and even in high-pressure reservoirs, would join the fleet next spring and begin activities in the summer.
Progress has also been made in onshore explorations with the announcement on Nov.1 of the discovery of an additional 60 million barrels of oil equivalent reserves from 26 new onshore explorations during the year.
Turkey has also accelerated its efforts to resolve disputes in the Eastern Mediterranean. While Turkey and Greece began a new round of exploratory talks in Istanbul on Jan. 24 after a five-year hiatus, Foreign Minister Mevlüt Çavuşoğlu signaled on March 4 that Turkey could sign an agreement on maritime jurisdictions with Egypt following negotiations.
"Depending on the course of our ties, as two countries with the longest land and sea borders in the Eastern Mediterranean, we could also sign an agreement with Egypt by negotiating maritime jurisdictions," Çavuşoğlu said, recalling that Egypt signed an agreement with Greece on the boundaries in the Eastern Mediterranean that respected the southern borders of Turkey's continental shelf.
On May 5, a Turkish delegation headed by Deputy Foreign Minister Sedat Önal visited Cairo at Egypt's invitation. At the end of the visit, the two countries issued a joint statement describing the exploratory round of bilateral talks as "frank and in-depth." Turkey and Egypt on Sept. 8 ended the second round of exploratory consultations by agreeing to continue the talks.
Israel's then-Energy Minister Yuval Steinitz said on March 10 that Tel Aviv was ready to cooperate with Turkey on natural gas. This was echoed by Israel's then-Prime Minister Benjamin Netanyahu who said on March 12 that his government was in contact with several countries, including Turkey, over natural gas in the Eastern Mediterranean Sea.
Netanyahu's remarks on talks with Turkey were the first to be publicly announced. The former Israeli prime minister confirmed that Israel was also holding talks on tackling the issue of gas exports to Europe with Egypt, Greece and the Greek Cypriot administration.
On March 8, Israel, Greece and the Greek Cypriot administration signed a memorandum of understanding on the EuroAsia Interconnector that connects the electricity grids of the three states through a subsea cable.
Turkey expressed strong reservations over the lack of consultation on the EU-backed project on March 16. Ankara sent a diplomatic note to the Greek and Israeli embassies as well as the delegation of the European Union, recommending consultation with the Turkish government before further action be taken.
Most recently on Nov. 29, President Recep Tayyip Erdoğan said that the appointments of Israeli and Egyptian ambassadors would be scheduled once Turkey decides on a course of relations for each country.
Meanwhile, Turkey and the Turkish Republic of Northern Cyprus (TRNC) signed two cooperation protocols on April 29 to meet the energy needs of the TRNC.
2021 also saw a major addition of renewables to the country's energy mix through mini solar Renewable Energy Resource Zone (YEKA) tenders, known as YEKA GES-3, on April 26.
On May 26, Dönmez announced plans to administer four YEKA tenders for solar and wind, each with a capacity of 2,000 megawatts (MW).
The Global Electricity Review 2021 report released on March 29 by London-based think-tank Ember revealed that Turkey outpaced the world average in electricity generation from wind and solar in 2020.
It generated 12% of its electricity from wind and solar in 2020 relative to the world average of 9.4%. The share of all renewable sources stood at 43% out of the country's total power generation, with coal and gas accounting for 34% and 23%, respectively.
On June 21, the Renewable Energy Guarantee of Origin (YEK-G) System and the Organized YEK-G Market to enable electricity producers to prove the source of renewables under Energy Exchange Istanbul (EXIST) launched for contracts.
Clean power investments in Turkey have also hit $66 billion with renewables constituting over 53% of Turkey's total installed electricity capacity, according to data of Electricity Transmission Company (TEIAŞ) on Sept. 16.
In WindEurope's report published on April 13, Turkey was ranked as the fifth-biggest wind power investor in Europe in 2020 with 1.6 billion euros ($ 1.8 billion). Wind power plants accounted for over half, or 51.5%, of Turkey's additional electricity capacity of 1,268 MW during the January-April period.
Turkey's installed wind energy capacity crossed the 10,000 MW threshold at the end of August, reaching 10,010 MW. It became the largest source of electricity generation for the first time in the country's history with a 22.6% share on Nov. 28. Wind power plants generated 178,964 megawatt-hours (MWh) out of a total of 791,794 MWh of daily electricity output.
The country's wind electricity generation hit an all-time record on Dec. 11, generating 20.01% of total power, when wind power produced 187,598 MWh of electricity.
Turkey in October became the last country in the G-20 group of major economies to ratify the Paris climate agreement, after demanding for years that it must first be reclassified as a developing country, which would entitle it to funds and technological help.
The goal under the 2015 Paris Agreement is to limit the rise of global temperatures to well below 2 degrees Celsius (3.6 degrees Fahrenheit) above preindustrial levels, while pursuing efforts to limit the rise to 1.5 degrees Celsius.
Ankara signed the Paris accord in April 2016 but did not initiate the ratification process, arguing that it should not be deemed a developed country for the purposes of the accord and that it was responsible for a very small share of historic carbon emissions.
The agreement came into force in Turkey on Nov. 10. Within this framework, Turkey will update its Nationally Determined Contributions (NDCs) – the means by which each country every five years shows efforts to reduce national emissions and adapt to the impacts of climate change.
On Sept. 17, the European Commission's executive vice president for the European Green Deal and Turkish minister of environment and urbanization held the first EU-Turkey high-level dialogue on climate change. The officials discussed the necessary steps to fight the devastating effects of climate change and to significantly cut emissions by 2050.
May of 2021 was marked as the warmest in the last 51 years in Turkey, according to the country's meteorology department on June 18. The average May temperature in Turkey rose by 2.6 degrees Celsius, according to data from the Turkish State Meteorological Service.
With the easing of COVID-19 restrictions and acceleration of energy demand amid the global energy crunch, Turkey made further efforts to attract new investments and contracts to meet the country's growing energy needs.
Turkey's daily natural gas consumption reached a record high of 280 million cubic meters on Jan. 19. The gas consumption increased amid cold weather conditions and lockdowns during the pandemic, which saw a rise in household gas use.
On April 22, Turkey's first floating LNG storage and gasification vessel (FSRU), Ertuğrul Gazi, arrived in Turkey and anchored at the Dörtyol port in the southernmost province of Hatay following its certification.
On Sept. 8, a confidentiality agreement for cooperation on LNG as bunker fuel for sea-going vessels was signed between the natural gas distributor BOTAŞ, which aims to become the most environmentally-friendly public institution in Turkey, Arkas Bunkering, a subsidiary of Turkey's Arkas Holding and an established maritime transportation company, and Sumitomo Corporation, one of the largest holdings in Japan.
On Oct. 1, Turkey launched the Natural Gas Futures Market (NFM) under the country's energy exchange, EXIST.
On Oct. 15, an additional natural gas trade agreement of 11 bcm to run until the end of 2024 was agreed between Azerbaijan and Turkey.
Turkey and Nigeria also signed three memorandums of understanding in the fields of energy, hydrocarbons and mining on Oct. 20.
Turkey's Power Futures Market was launched on June 1 within the EXIST to provide market stability and transparency to market participants who currently trade on the spot power market in day-ahead and intraday markets operated by the energy exchange.
On July 3, the TEIAŞ was included in the scope of the country's privatization. A presidential decision published in the Official Gazette confirmed that preparatory measures would be made for privatization in cooperation with the Energy and Natural Resources Ministry and the Privatization Administration.
On Feb. 11, Russian energy company Inter RAO announced the sale of a 0.82% stake in the Akkuyu Nuclear JSC, the project company of Turkey's first nuclear power plant Akkuyu, for around 1 billion rubles ($13.5 million) in the fourth quarter to a shareholder whose identity has not been disclosed.
Inter RAO is only one of six Russian companies along with Rusatom Energy International JSC, Atomstroyexport CJSC, Rosenergoatom JSC, AtomTechEnergo JSC and Atomenergoremont JSC that have shareholdings in Akkuyu Nuclear JSC.
The foundation of the third unit of the Akkuyu nuclear power plant was laid on March 10 with a groundbreaking ceremony attended by Erdoğan and his Russian counterpart Vladimir Putin.
Erdoğan said on Sept. 18 that the first unit of the Akkuyu plant would be completed by May 2023. Turkey will swiftly start preparations for its second and third nuclear power plants, Erdoğan said in November. In September he said Russia could also be involved in the construction of the second and third nuclear power plants.
Russia's largest lender Sberbank announced on Nov. 17 that it would provide loans of $800 million for the construction of Akkuyu NPP. The seven-year loan will be provided to the project company Akkuyu Nuclear JSC.
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