TURKEY: Energy Ministry launches private power drive

13 September 1996

Plans to invite bids for the construction of 17 major power plants according to a newly elaborated build-operate (BO) formula up until 2010 have been announced by the Energy & Natural Resources Ministry. They include three plants to be attached to large liquefied natural gas (LNG) terminals in projects totalling up to $9,000 million in which international oil majors have already taken a keen interest.

Most of the projects have earlier been offered to investors on a build-operatetransfer (BOT) basis. Companies with previous agreements have the option to continue with BOT or to convert to BO.

Few firms had applied to retain their BOT status by a deadline of 2 September, said Osman Ilhan, general director of energy affairs at the ministry. The exceptions included the UK's Dominion Bridge for a 650-MW plant to be fired by fuel oil at Cannakale.

The ministry has set a closing date of 27 September for prequalification applications under the BO model.

Evaluation will start on 10 October, and the results will be announced on 20 December.

Contracts for the three LNG terminal projects, costing a total of $6,000 million8,000 million, could be awarded in seven-eight months. The ministry had already received separate proposals for similar projects from oil majors Royal Dutch/Shell Group, Mobil Corporation, Total, Amoco Corporation and The British Petroleum Company (BP), which were now expected to submit applications, ministry sources say.

Shell had sought permission, along with Japan's Mitsubishi Corporation and The MW Kellogg Company of the US, for feasibility studies into a $2,400 million project for an LNG terminal with an associated, combined-cycle power station with an eventual capacity of about 2000 MW, and a first stage of 650-700 MW. An application for the construction of two LNG terminals and a power station on a similar scale to the Shell proposal had also been submitted by Mobil Power, a subsidiary of the major.

Three sites were to be offered for the terminals and power stations. near Turkey's existing LNG terminal at Ereglisi in the Sea of Marmara, at Aliaga near Izmir on the Aegean, and at Iskenderun in the eastern Mediterranean, the ministry sources said. The terminals will have an annual LNG conversion capacity of 4,000 million-6,000 million cubic metres, and each of the power stations will have two stages of 700 MW.

The oil majors and their partners will provide financing, and will also construct and operate the power stations according to the build-own-operate (BOO) model recently introduced by the Turkish government. Startup of the power stations is expected by 2000 or 2001, the sources say.

The existing Ereglisi terminal at present has a capacity of about 6,000 million cubic metres. Projects for the construction of two 500-MW combined-cycle power stations nearby on a BOT basis at a cost of about $1,100 million are close to the signing of final contracts and construction starts, according to industry sources.

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