Tuesday, November 19, 2013

New Projection For Natural Gas Supply Of Turkey: TANAP Project | Montaq

Turkey: New Projection For Natural Gas Supply Of Turkey: TANAP Project

Last Updated: 19 November 2013
Article by Zuhal Uysal
The part of the natural gas increases progressively in Turkish energy market due to its advantages, such that it has been subject to large projects. TANAP Project is one of the largest natural gas projects in the world with an investment amount of USD 9,0, which is regarded as one of the largest direct investment in natural gas market in Turkey aiming to minimize external natural gas dependence in Turkey. After the start of gas flow, it is expected that Turkey's natural gas market will be influenced positively. However, there are predictions concerning the natural gas sale and import from Turkey with regard to the privatisation of İGDAŞ which comes to the fore within the frame of the Draft of New Regulation on Natural Gas Energy.

TANAP Project at a glance

TANAP Project has been signed through the Agreement by Turkey's and Azerbaijan's governments in 2012 which has been promulgated in Official Gazette on 19 March 2013. According to this Agreement, this project is intended to transmit the natural gas from Azerbaijan to Europe through Turkey and sell it to Europe. This aims diversifying of natural gas resources and also the incentive of natural gas transmission over Turkey. For conduction of this project a consortium has been established. The project partners are the Azerbaijan company SOCAR , BOTAŞ, BP and STATOIL. The partnership interest of SOCAR is 51%, BOTAŞ and TPAO have a share of % 20. The rest 29 % is held by BP, TOTAL and STATOIL. Transfer of interest to these companies may attract attention and provide support of Europe to this project. However, Turkey does not intend to sell or decrease its shares on this project.

This project is regarded as the biggest contribution to the natural gas supply of Turkey. The tender process of this project has been set off recently, and according to SOCAR, start of construction process is expected in 2014. If the project ends in due time, gas flow is predicted to start in 2018. It is expected that the gas amount will increase until 2026. Important is that the revenue from the sale of gas will contribute to development of Turkey's economy. This project will also provide the increase of Turkey's geostrategical importance. According to the agreement, 6,0 billion bcm of the natural gas which will be transmitted to Europe will imported to Turkey and the rest of 16 billion bcm gas will be imported to Europe. Turkey is dependent on external natural gas energy and its natural gas consumption has been increasing year over year. Accordingly, this natural gas of 6 billion bcm will contribute to minimize its dependence on natural gas export, and also contribute to meet of natural gas demand of Europe.

Providences regarding privatisation of İGDAŞ

As is known, the privatisation of İGDAŞ is topical and the Draft of New Natural Gas Energy Regulation admits to this privatisation with certain incentives, in which SOCAR is interested. In the event that SOCAR takes İGDAŞ over, its possibilities regarding competition in natural gas energy market, especially positive and negative sides of centralizing of diverse activities such as transmission, distribution and import of natural gas in an institution may be discussed. According to the experts' opinion, another possibility is that more natural gas than intended may remain in Turkey. It is certain that TANAP will meet a big part of natural gas demand of Turkey in all cases and it may contribute to decrease of natural gas prices in Turkey.

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