IMPORTS of gas and oil will cover a growing share of Turkey's rapidly expanding energy needs in the years ahead. Gas, in particular, is poised to take on a pivotal role and Turkey has woven a web of contracts with potential suppliers to cover its expected needs. The most recent of these was signed in August when a long-term supply deal was initialed with Iran.
The reason for the urgency is the rapid rate of the growth in demand. Gas consumption is expected to increase to around 30,000 million-35,000 million cubic metres a year (mcm/y) by 2010, from around 8,000-9,000 mcm/y in 1996, according to the Energy & Natural Resources Ministry. Domestic oil production is declining and Turkey wants to reduce its reliance on lignite (brown coal), of which there is a plentiful local supply, because it is highly polluting.
There is no such abundance of domestic gas. Fields in Thrace and southeast Anatolia produce about 220 mcm/y and total exploitable reserves are estimated at only 8,700 mcm. Three new wells in the Sea of Marmara are expected to produce another 360 mcm/y, when production starts towards the end of 1996; the state-owned Turkish Petroleum Corporation may also be able to tap sizeable reserves through its participation in Caspian Sea concessions.
Most of the medium to long-term demand increase will have to be met by imports, however. By mid-October, it appeared that the Energy Ministry, advised by state pipeline and gas agency Botas, had made more than adequate provisions. Botas officials say that the government wants to make sure that it is covered in the event that the supply targets enshrined in the various agreements cannot be met in full. Senior Energy Ministry officials add that Ankara also wants to strike a balance between piped natural gas and liquefied natural gas (LNG), which is generally more expensive.
There are potential problems with several of the proposed sources of gas. For example, supplies of Siberian gas from the Russian Federation have been disrupted in recent years by economic and political strains in the former Soviet Union, particularly an on-going pricing and payment dispute between Russia and the Ukraine which also takes gas from the spur that supplies Turkey.
In spring 1994, supply shortfalls even forced the temporary shutdown of the Ambarli combined-cycle, gas-fired power station which supplies much of Istanbul's electricity. Despite these problems, Siberia will continue to be the staple source of gas well into the next century. Indeed, provisions are already being made to boost supplies from the 6,000 mcm/y agreed with Moscow in 1984 to around 30,000 mcm/y by 2010.
To guard against such reliance on a single source, Algeria and Australia have been tapped for supplies of liquefied natural gas (LNG). Algerian supplies are required to fill gaps at times of peak demand and began in 1994 at a rate of 2,000 mcm/y of gas equivalent via an import terminal at Ereglisi on the Sea of Marmara. In autumn 1995, throughput was boosted to 3,000 mcm/y and the Ereglisi terminal also started to receive limited cargoes from Australia's offshore North-West Shelf.
In mid-August, Prime Minister Necmettin Erbakan used his first foreign visit as premier to sign a controversial gas supply deal with Iran. Coming hard on the heels of US legislation intended to block most foreign investment in Iran's energy sector, it sent a clear message about the new Turkish government's intentions. In fact, the groundwork for the deal was done by the previous administration and it should have come as no surprise. It calls for Iran to supply Turkey with gas for 23 years, starting at around 3,000 mcm/y in 1999, and rising to about 10,000 mcm/y by 2005. A pipeline will have to be built; construction tenders for the Turkish section may be invited in November (see page 30).
In February, another agreement was struck for the supply of natural gas from Turkmenistan. This would start at 2,000 mcm/y in 1998, and rise in stages to 5,000 mcm/y in 1999-2004, 10,000 mcm/y in 2005-2009 and 15,000 mcm/y 2010-2020. The logistics of this deal are particularly complex due to the huge distance involved, although there are plans for the Iran-Turkey pipeline to form part of a much larger project to export Turkmen gas to Europe after 2005.
LNG purchases equivalent to 2,000 mcm/y from Qatar over 25 years are planned to start in mid-1988 or early 1999. Nigeria LNG supplies equivalent to 900 mcm/y of natural gas will also begin in 1999.
Industrial and domestic demand are the main sources of growth and the gas is needed for several combined-cycle power stations that are planned. So urgent is the requirement that the Energy Ministry wants to build six major stations on an emergency, build-own-operate (BOO) basis at an estimated cost of about $4,600 million. The country's oil majors have already offered to build linked LNG import terminals, and Botas recently invited consultancy bids for additional terminals at Aliaga near Izmir, and Iskenderun in the eastern Mediterranean.
There are 13 BOO projects altogether in a $24,000 million integrated construction programme being drafted by the ministry to cover needs to 2020 and beyond. The programme also includes gas projects planned by Botas worth about $3,650 million.
The largest of these is a 1,160 kilometre pipeline to transport Siberian gas from Georgia to Ankara which will cost an estimated $1,100 million to lay. Before this is built the existing trunkline from the Bulgarian border to Ankara will expand its capacity to 14,000 mcm/y.
Other Botas gas projects include underground storage to be developed at Silivri in the northern Marmara region as well as under the Tuz Golu (Salt Lake) in central Anatolia. A southern pipeline will also be built from Sivas to Adana. Finally, also proposed recently was the ambitious, so-called eLasserrei pipeline that would transport Siberian gas via Turkey to Israel. With a length of about 1,600 kilometres and an estimated cost of about $2,000 million, the pipeline will have a capacity of 16,000 mcm/y, of which Turkey plans to buy 10,000 mcm/y.
By developing such an array of options for its future supplies of gas, Turkey has demonstrated a distinct preference for gas over other fossil fuels. It remains to be seen whether it can demonstrate a similar ability to bring so many complex and costly projects to fruition.
Jim Bodgener in Istanbul
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