TURKEY: Agreement reached on Russian gas price

08 April 1994

Agreement was reached on a new price for Siberian gas with Russia in Moscow on 24 March. Lack of assured gas supplies had held up contract negotiations for large gas-fired plants, say officials.

Central to the agreement is the Russian withdrawal of demands that Turkey pay European prices, and that the new price be applied retroactively to 1993 supplies.

Russia's Gazexport will also now supply an additional 2,500 million cubic metres of gas to the 6,000 million cubic metres already agreed for 1994. During April, state gas and pipeline agency Botas will negotiate a price for the additional gas, and the supply of a further 2,500 million cubic metres.

Uncertainty over the gas supplies had slowed progress for several months in the negotiations with consortia led respectively by the US' Enron Corporation and Unit International for large, $1,000-million plants, together with a smaller, 100-MW station proposed by the local Dogan grouping. The plants would be run on a build-operate-transfer (BOT) basis.

These would be sited near the import terminal for Algerian liquefied gas supplies, which can also be used to store the Siberian gas. The foreign partners in the consortia were unlikely to proceed without assurances on gas supplies, according to the officials.

Adding to the uncertainty have been supply shortfalls caused by a price disagreement between Russia and the Ukraine, which is also on the spur ending in Ankara from the trunk Siberia-Europe line.

The Turkish Electricity Board (TEK) was forced to shut down at least one existing gas-fired plant temporarily before the dispute was resolved and supplies resumed.

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