15 October 2006
TURKEY’S ROLE AS AN ENERGY HUB
Chairman of the EU Commission in the Turkish Parliament,
Former Minister of Foreign Affairs
The arrival of the Caspian oil in the Turkish Mediterranean Sea port of Ceyhan is an important milestone in Turkey’s steady progress towards becoming an energy hub in the region. The importance of Bakou-Tbilissi-Ceyhan (BTC) pipeline that carries this oil is in the fact that it demonstrated that a pipeline from the Caspian Sea basin to the Mediterranean seaports is an economically profitable project.
Now that this has been demonstrated, other pipelines may follow suit in the future, since the existing line alleviates three major problems that affect the cost of a pipeline, namely the expropriation costs, energy to be utilized to operate pumps and security measures to protect the pipeline from vandalism or terrorist attacks.
There are two more existing pipelines that carry natural gas to Turkey; one of them is called the “Blue Stream” and carries natural gas from the Russian Federation to the Turkish Black Sea city of Samsun. The other carries Iranian natural gas to the Eastern Anatolian city of Erzurum.
However, there are more pipelines in the pipeline: One is going to be laid parallel to the BTC oil pipeline and will carry natural gas from the Caspian Sea basin to Erzurum. Initially it will carry Azeri natural gas; in the future Kazakh gas may also join it. This stage of the project will be implemented when the artificial problem stemming from the Russian claim that this will cause environmental hazards in the Caspian Sea will be overcome.
Other pipelines include Samsun-Ceyhan bypass pipeline. It is called bypass, because it bypasses the Turkish straits. A Turkish construction company has secured international financing for the project and the start of the implementation of the project seems to be soon.
Turkey will also receive Egyptian natural gas, through Jordan and Syria. The pipeline is already laid up to Amman in Jordan and continues its way towards Syria.
When and if situation in Iraq is stabilized, or even before it is stabilized, Iraq may wish to export its natural gas as well. In case this happens, the most economical route for this gas to international markets will again be through Turkey.
These were the pipelines that carry sources of energy, namely oil and gas, to Turkey. The quantity of both oil and gas being above Turkey’s need, major part of it is destined for export. One gas pipeline is already being laid between Turkey and Greece with a capacity of 11 billion cubic meters per year. The pipeline will continue its route through the Greek coastal town of Igoumenitsa to Italy. Greece will start buying only 700 million cubic meters per year at the beginning and this volume will increase to 3 billions in the subsequent years and the remaining 8 billion cubic meters of gas will be purchased by Italy.
A bigger gas pipeline is to be laid from Turkey Turkey to Austria passing through Bulgaria, Romania and Hungary. This pipeline, called Nabucco, completes the network that we will see in Turkey in a few years to come.
Turkey is not an oil or gas producing country. Oil produced in Turkey constitutes only a negligible part of its consumption. As to natural gas, we have to wait and see what the offshore discoveries in Akçakoca will offer. However despite the fact that Turkey is not a major oil an gas producer, it may still contribute, thanks to its geographical location, to the efforts of the European Union countries to diversify their sources of energy.