Pipeline project to turn Turkey into an energy hub
Feb 27, 2014 - 12:00 am GMT+3
by Feb 27, 2014 12:00 am
Turkey is taking steps forward on the largest energy project in its history. Now the Trans-Anatolian Natural Gas Pipeline project is becoming a reality thanks to efforts by the government and private sector allowing natural gas to be transported from Azerbaijan to Southern Europe
Abdülkadir Karakelle - Istanbul
Minister of Energy and Natural Sources Taner Yıldız said yesterday that plans to designate land for the Trans Anatolian Natural Gas Pipeline (TANAP) were presented to the cabinet for approval on Monday. TANAP is seen by many as central to Turkey's effort to become a regional hub for transportation of energy resources "[Natural gas that] is produced will be transmitted and what is transmitted will be consumed. This marketing economy will certainly apply to the project. What we are talking about is a figure of $45 billion that needs to be spent in five years. In this sense, Turkey will rapidly do its part," the minister said.
Energy Minister Taner Yıldız stressed that Iran's recent peace overtures will influence its energy and natural gas projections and that the latest measure adopted by the cabinet will permit Iranian natural gas to be transported through Turkey.
Director of BP in Azerbaijan, Georgia, and Turkey, Gordon Birrell also said on Tuesday that the Shah Deniz Consortium, of which Turkey is a member, made an initial investment offer for developing of the second stage of the Shah Deniz gas field on the Caspian Sea within Azerbaijan territorial waters. Birrell pointed out that the Southern Gas Corridor Pipeline will not only change the energy map but also ensure that Azerbaijani gas is directly delivered to European consumers. "The Southern Gas Corridor is a milestone for Turkey [on its way to being an] energy hub.
It will contribute much to the energy security of Turkey and supplement gas [to the tune of] 6 billion cubic meters," said Birrell.
İbrahim Palaz from Hazar Institute of Strategy said TANAP, which is a multidimensional project, has various meanings for Turkey. Mr. Palaz says, "First of all, TANAP is the largest energy project in Turkish history. In a period that governments are tightening belts, Turkey is attempting an extremely costly project which will serve the Turkish nation for decades.
Secondly, as known, Turkey is dependent on outside natural gas sources, diversifying the import routes is a crucial matter for Turkey. Through TANAP 6 billion cubic meters of natural gas will reach Turkey for its own use during the initial years, and 10 billion cubic meters of gas will be exported to Southern Europe via Trans Adriatic Pipeline (TAP), a follow up project to TANAP.
Deficit to decrease
Dr. CemilErtem says "Energy imports have more than a 60 percent share in Turkey's current account deficit. With this project Turkey will reduce its current deficit by buying natural gas cheaply and selling it to southern Europe countries. More importantly, Turkey will be a quoting country in the natural gas market which supports Turkey's claim of being an energy hub. I believe after 2019 Iraqi gas and Mediterranean gas will also get involved in to TANAP."
TANAP is a lifesaver
Socar Turkey CEO Kenan Yavuz says, "Russia is the largest supplier to EU and Turkey. However, this cannot last forever. Natural gas demand is increasing in region every passing day and I don't think that only one source can meet that demand. In this manner, TANAP will be a lifesaver far the countries it reaches. In particular, Turkey will be the country that TANAP will serve most. As is known Turkey imports gas from various countries including Iran. Iran has been selling gas to Turkey approximately twice as much as the rest of the international market. If TANAP enters into service as planned, most probably Iran will have to change its gas policy toward Turkey."
$3 billion saved every year
A senior official from the Ministry of Energy and Natural Resources also drew attention to TANAP being a project that is composed of various subprojects.
He says "In order to supply gas to TANAP, Azerbaijan will conduct natural exploration works in the Shahdeniz II Zone. The State Oil Company of Azerbaijan Republic (SOCAR), British Petroleum (BP), Turkish Petroleum Corporation (TPAO) will cover the costs of both pipeline projects and exploration works. Total cost may reach $50 billion and Turkey's investment will be around $9 billion. Turkey is to save more than $3 billion per year with TANAP.