The groundbreaking ceremony for the Trans-Anatolian Natural Gas Pipeline (TANAP), which will carry gas from Azerbaijan to Europe via Turkey, was held in Baku on Saturday. Experts believe that the project has great importance in terms of Europe and Turkey's energy security. The pipeline is planned to pump 16 billion cubic meters (bcm) of gas per year, 6 bcm of which will be designated to Turkey's domestic consumption.
TANAP project managers say that the pipeline will transfer 31 bcm of gas and Turkey - the ninth biggest gas importer by 45 bcm per year - has a right to increase its share to 21 bcm per year when the pipeline starts to function with full capacity by 2023. Energy specialists forecast that Turkey's total gas consumption will reach 70 bcm per year in 2020.
Speaking to Daily Sabah, Ibrahim Palaz, a veteran energy expert at the Istanbul-based think tank Caspian Strategy Institute, noted that TANAP is quite an important project for Turkey and Azerbaijan, but it is a crucial project for the European Union whose natural gas demand has been increasing and is expected to increase more in the future. "Even if the latest conflict between the EU and Russia, the top gas supplier to the EU, is left out of the equation, European countries are still in need of new energy routes enabling them to diversify energy suppliers, which is the most vital issue of energy politics,"Palaz said.
Underlining that TANAP has been on the agenda of Turkey, Azerbaijan and the EU long before the political crisis between the EU and Russia regarding the Ukraine crisis, Palaz remarked that TANAP will not only provide gas, but will also provide security to the countries it passes through. "Turkey, a country which lacks hydrocarbon sources, is obligated to be become an energy transfer route to have a say in global energy politics. TANAP is the second step taken for this cause. The first one was the Baku-Tbilisi-Ceyhan crude oil pipeline, which enables Azeri oil to reach the global market," Palaz said.
According to Palaz, Turkey will not make a direct economic gain in the short term, but when the transfer capacity increases and reaches 31 bcm Turkey is expected to yield around $2-3 billion (TL 4.47-6.70 billion) per year from the transfer fees.
Kenan Yavuz, CEO of SOCAR Turkey - a local branch of the state-owned Azerbaijani SOCAR company that holds the majority stake in the project - told Daily Sabah that the latest ceremony held on Sept. 20 in Azerbaijan was to celebrate the initiation of the Shah Deniz II gas reserve field to pipeline route. "TANAP is a $45 billion project which is being carried out by Turkey and Azerbeijan's efforts. With the groundbreaking ceremony Turkey sealed the fact that it is a strategic energy player in the region. As it is known, Turkey's state-run oil and gas company TPAO is the second largest partner in the Shah Deniz II field where the gas is to be extracted and sent through the TANAP line.
In May 2014, Turkey's TPAO purchased the assets of French oil and gas giant Total for $1.5 billion which used to hold 10 percent in the Shah Deniz II field and increased its share in the field to 19 percent. TPAO also holds a 30 percent stake in the pipeline. Turkey has become a key player in the region thanks to its latest regional energy policies,"Yavuz said.
Highlighting the EU and Turkey's increasing energy demand, Yavuz further stated that uncertainties that emerged due to the Ukraine crisis brought energy security issues into question and supplier diversity has become the top item on the energy agendas of countries in the region. "The project is a matter of security for the EU," the CEO said.
Yavuz also stated that TANAP will pave the way for other large energy projects in the region. "Governments and companies will benefit from the experience of TANAP, which I would I like to call the Silk Road of energy," Yavuz concluded.