The price of natural gas is not forecast to change in the near term, Energy and Natural Resources Minister Fatih Dönmez said Friday.
Highly dependent on foreign natural gas imports, Turkey last saw a gas price increase of 14.9% on Aug. 31.
Dönmez explained that gas prices are indexed to oil prices, which have fluctuated in recent months, and have been impacted by recent sanctions and the fallout from the Saudi drone attacks.
"In recent months, it is mostly geopolitical events, like embargoes on Iran and Venezuela, that pushed oil prices higher. We believe such one-sided embargoes have a negative impact on energy-dependent countries like Turkey," Dönmez told Turkish television station NTV in an exclusive interview.
As natural gas prices, which are indexed to crude oil prices, also lag six months behind price changes, Turkey will watch the market and price dynamics closely in the medium and long-term for any potential changes, he said.
GAS STORAGE PROJECTS
To ensure energy security, the country is taking steps to expand the country's gas storage facilities.
Turkey consumes close to 50 billion cubic meters (bcm) of gas every year and has additional storage under construction at the Lake Tuz (Tuz Golü) natural gas storage facility, located in central Anatolia.
The Lake Tuz facility has the capacity to store 600 million cubic meters (mcm) of gas and has another 600 million mcm of capacity under construction with plans to reach 5.4 bcm by 2023 or 2024.
In addition, the gas storage facility, near the industrial heartland of Istanbul in Silivri province, has a capacity of 2.8 bcm but targets a total gas storage capacity of 4.6 bcm by 2023, Dönmez added.
"When you combine the Lake Tuz and Silivri projects' target storage capacities, they will add up to 10 bcm, equivalent to 20% of Turkey's annual consumption," he said. To complement the gas storage facilities, the minister added that Turkey has
added two liquefied natural gas (LNG) terminals in Turkey.
While Turkey's first floating storage regasification unit (FSRU) was launched in Aliağa, İzmir in December 2016; a second FSRU was launched in Hatay, a province in the Mediterranean region, in early February. Turkey also has two major gas pipeline projects that will help meet its energy demand and supply gas to neighboring countries.
Dönmez said the TurkStream natural gas pipeline, which will carry gas from Russia to Turkey and Bulgaria, is making "very fast progress," with its completion expected by the end of 2019. One of the two pipelines will be connected to Turkey's power grid, and the other will reach Europe. The second phase of the Trans-Anatolian Natural Gas Pipeline Project's (TANAP), from Eskişehir in central Anatolia to Edirne in the Thrace region, is "almost complete," he added. The project will be an integral part of the Southern Gas Corridor that will carry gas from Azerbaijan to Italy. "Both these projects will provide energy security for Turkey and the region," the minister said.
With much of its gas use dependent on foreign sources, Turkey is trying to decrease the amount of its energy consumption with the launch of two nuclear projects.
Akkuyu nuclear power plant, located in southern Turkey, is on schedule with its first reactor due to come online in 2023, the 100th anniversary of the foundation of the Turkish Republic, Dönmez said. On the other hand, the Sinop nuclear plant project in northern Turkey saw its collaboration with its Japanese partners end recently. "When Japan's feasibility report came, costs were higher than anticipated, so we ended the process. But we will continue a strong economic relationship with Japan. We will resume the nuclear project in Sinop; however, we don't know yet what country or which technology that will be with," Dönmez explained.