A memorandum of understanding was signed with Turkmenistan in Ankara on 12 February providing for supplies of Turkmen natural gas reaching 15,000 million cubic metres a year (cm/y) by 2020 (MEED 16:2:96). The accord was signed by President Suleyman Demirel and his visiting Turkmen counterpart, Saparmurad Niyazov.

The accord, once signed in May, would effectively replace an estimated $7,000 million project for a pipeline via Turkey and Iran to Europe, Energy Ministry sources say.

The project stalled in 1995 over difficulties in raising Western financing due to the US’ antiIran stance, according to industry sources.

The memorandum also provides for the award of a drilling licence to state Turkish Petroleum Corporation (TPAO) for an oil field in Turkmenistan with a reserve of about 140 million barrels.

The memorandum provides for the initial supply of 2,000 million cm/y of Turkmen gas from 1998. The supplies will then rise to 5,000 million cm/y by 2004, 10,000 million cm/y by 2010, and 15,000 million cm/y by 2020.

The gas will initially be transported through an existing pipeline with a capacity of up to 10,000 million cm/y running via Kazakhstan, Russia and Georgia. The gas will then be carried through either Georgian or Armenian territory to Turkey.

The Georgian option would require construction of a 160-kilometre pipeline, and a 15-kilometre link through Armenia, the ministry sources say. Either option could connect with a pipeline to be constructed from Ankara to the Iranian border as part of a separate agreement pending finalisation with Tehran for Iranian gas supplies, they add. These options superseded a proposal for a much longer, 400-kilometre link via Georgia last autumn to Turkmenistan during a visit by Prime Minister Tansu Ciller to Ashgabat in the autumn, they say.

According to a preliminary agreement signed with Tehran in May 1994, a $1,100 million, 1,200-kilometre pipeline will be constructed between Tabriz and Ankara. The envisaged 23-year deal valued at around $20,000 million provides for Iranian supplies starting at an initial 2,000 million cm/y from 1998, rising eventually to 10,000 million cm/y.