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The Role of Turkey in International Energy Projects
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Transcript of The Role of Turkey in International Energy Projects
1
The Role of Turkey in
International Energy Projects
Izmir University of Economics
International Relations and EU
Vıldan Demirkıran
2012-2013
ES330 International Energy Policies
DR. Özlem DÖĞERLİOĞLU IŞIKSUNGUR
2
Contents
Introduction ........................................................................................ ….3
Turkey’s Energy Profile and Strategy……….………..................... …4
Privatization in energy sector.................................................................5
Turkey’s Global Energy Strategy………………………………….. ...6
The Caspian Sea Region..........................................................................7
Russia and Iran in Turkey’s Global Energy Strategy...........................8
Energy Relations with Russia……………………....................................8
Energy Relations with Iran…………………. ...................................... ..9
Importance of Turkey’s Existing Pipelines and Pipeline Projects for the South
Caucasus…………………………………................................................. 10
Table 1: Turkey’s International Pipeline Projects.................................13
Oil and Natural Gas Pipelines .................................................................14
Baku-Tblisi-Ceyhan Crude Oil Pipeline(BTC).......................................14
South Caucasus (Shah Deniz) Natural Gas Pipeline (SCP)...................16
Turkey-Greece- Italy Natural Gas Pipeline…………………………….16
Trans-Caspian Oil and Gas Pipeline Projects………………………......16
Iran-Turkey Natural Gas Pipelin..... ……………………………………16
Nabucco Natural Gas Pipeline.................................................................. 17
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ABSTRACT
In this paper it will be examined that the role of Turkey in international energy projects.
Turkey is a country does not have any significant energy resources and imports gas from
Russia and oil from the Middle Eastern countries on a large scale. Although Turkey wants to
decrease its energy dependence on gas and oil resources from those countries, its dependency
on foreign energy suppliers is continually increasing. On the other hand, most of the world’s
proven hydrocarbon reserves are located around Turkey. Turkey has a border with landlocked
energy producers in the Caspian Sea region. This region contains considerable oil and gas
reserves in the world. Therefore, Turkey plays a significant role by its geopolitical position as
a transit country. Turkey is trying to break Russian monopoly on the transport of energy
supplies in this region by creating new pipeline routes. Due to the fact that, Turkey wants to
meet its rising domestic energy demand and provide transport to the EU, it has undertaken
several major oil and gas pipeline projects. With these projects, such as Baku-Tbilisi-Ceyhan
oil pipeline (BTC) and Baku-Tbilisi-Erzurum natural gas pipeline (BTE), Turkey contributes
to peace and prosperity in the region
4
Introduction
In Turkey, important energy resources are not existed, so it imports its energy from Russia
and the Middle East. While Turkey’s domestic energy needs is increasing, its dependency on
foreign energy suppliers is rising continuously. Therefore, turkey wants to decrease its
dependence on imported oil and gas reserves.
Turkey is neighbor to energy rich countries in the Caspian region and 71.8 percent of the
world’s proven gas reserves, and 72.7 percent of oil reserves, are located around Turkey. 1
Turkey is trying to increase and intensify its economic and political relations with the South
Caucasian countries. In this context, close cooperation with Turkey and South Caucasian
countries in the energy sector will make a vital contribution to accelerate the transition of
countries within the South Caucasus region toward a market economy. But, security is a main
problem in the region. Ethnic strife, territorial claims and “frozen conflicts” combine to make
this a volatile region. These conflicts are a source of instability and a significant obstacle to
regional cooperation. Therefore, security and stability in this region are very important for
Turkey because a relatively stable South Caucasus will pave the way for Turkey to
succesfully accomplish the completion of Nabucco. With the completion of the Nabucco
Project, as a transit country, Turkey will have a more influence on the security and prosperity
of the countries of the region.
1 Turkey’s Energy Strategy, Republic of Turkey Ministry of Foreign Affairs, Deputy Directorate General for
Energy, Water and Environment, 2009
5
Turkey’s Energy Profile and Strategy
Turkey has become one of the fastest growing energy markets in the world with a rapidly
growing economy. Turkey has been experiencing rapid demand growth in all segments of the
energy sector for decades. Over the last decade, Turkey has been the second country, after
China, in terms of natural gas and electricity demand increase. Turkey is expected to become
one of the most dynamic energy economies of the world with regards to increase in energy
demand.
Due to Turkey’s domestic energy sources are limited in light of its growing energy demand,
its dependency on energy imports is increasing, primarily of oil and gas. At present, around
26 % of the total energy demand is being met by domestic resources, while the rest is being
provided from a diversified portfolio of imports.
The primary aim of Turkey is to realize its own energy security. To this end, Turkey has for
objective to2:
- Put the projects into the practice which are related with providing energy needs of the
country safely, continually and with minimum cost and minimum environmental effect.
- Diversify its energy supply routes and source countries,
- Increase the share of renewables and include the nuclear in its energy mix,
- Activate to capabilities of the public and private sector in the free market
- Minimize negative effects on the environment,
- Take significant steps to increase energy efficiency,
- Contribute to Europe’s energy security.
Turkey is not responsible to reduce carbon dioxide emission within the frame of Kyoto
Protocol till 2012. However, expectations have increased concerning reduction of emissions
values of the countries after the form of 2012.
In this context, policy making on energy sector regarding improve of energy efficiency,
using more renewable energy, developing of clean coal technologies and using nuclear energy
into the relation between energy and environment will become important.
2 Ministry of Foreign Affairs of Turkey
6
Privatization in energy sector
Requirement of investment of energy sector is 120 billion dollars until 2020. This
investment cannot be made just by the government; domestic and foreign investors are
necessary. It is also necessary to prepare in order to privatize and liberalize to the sector.3
There are basic benefits which are expected from reform of electrical energy sector and
privatizations4.
- Decreasing costs by means of operating assets of generation and distribution of
electricity effectively and productively.
- Providing security of supply of electric energy and increasing quality of supply.
- Decreasing technical losses on distribution sector to the average of OECD countries
and prevention of illegal use of electricity.
- Providing ability to essential replacement and expansion investments by private sector
without imposing any obligation to public corporations.
- Reflection to the consumer that advantage which will be occurred on activity of
electric power generation and its trading by competition and regulation of service
quality.
Turkey’s Global Energy Strategy
3 EKOMER (Ekonomi-Finans Uygulama ve Araştırma Merkezi), Panel on “Enerji Güvenliği: Dünya ve
Türkiye” , April 28, 2010, p.16. 4 Istanbul Chamber of Commerce, Enerji Sektörünün Geleceği, Alternatif Enerji Kaynakları ve Türkiye’nin
Önündeki Fırsatlar, vol. 29, 2007, p.92.
7
Turkey is positioned in a geography where about 72 percent of the proved oil and natural gas
reserves of the world are covered, especially as the Middle East and the Caspian Basin. In the
period by 2030, the world’s energy consumption is projected to rise by 40 percent and is
expected to be covered to a significant extent from the resources in the region where Turkey
is positioned.(bakanlık rapor, 29)
According to the strategic plan of Turkey’s Ministry of Energy and Natural Resources,
Turkey is aiming at playing a significant role in the line of the developments in the global
energy sector and within framework of the advantages brought by its private geostrategic
condition, in the provision of the diversification of the supplier countries for its own energy
security, as well as leading a significant role in the transfer of the rich hydrocarbon resources
to the growing markets and especially the EU market.
Turkey gives a great importance to energy as a tool in or to reemergence of itself as a regional
geopolitical player. Most importantly, strengthening its energy security is Turkey’s main goal
in formulating its energy strategy. According to Babali, its energy strategy to achieve this
purpose can be summarized under three main principles5:
1. Decreasing Turkey’s over dependency on imported energy resources by increasing the
use of domestic energy resources (coal, hydrocarbon and renewables, including
hydropower) and by liberalizing its energy market. This also includes raising energy
efficiency within Turkey.
2. In terms of imported resources, to ensure diversification of both sources and suppliers,
as well as transportation routes to become a more effective key transit country and
energy hub between the energy-producing countries to its east and the energy-
consuming countries to its west.
3. Introducing and gradually increasing the share of nuclear energy in its energy mix.
5 Tuncay Babali, “The Role of Energy İn Turkey’s Relatıons wİth Russıa and Iran”, Center For Strategic and
International Studies, 2012, p. 2
8
The Caspian Sea Region
Caspian Sea is largest inland body of water in the world, lying to the east of the Caucasus
Mountains and to the west of the vast steppe of Central Asia. Its name derives from the
ancient Kaspi peoples, who once lived in Transcaucasia to the west. The sea has some
considerable geographic importance. It covers an area of about 386,400 km² that means larger
than Japan. The sea contains some 78,200 km³ of water which means about one-third of the
Earth's inland surface water6
The Caspian Sea is bordered in the northeast by Kazakhstan, in the southeast by
Turkmenistan, in the south by Iran, in the southwest by Azerbaijan, and in the northwest by
Russia and also even Uzbekistan has not a border with the Caspian Sea it is counted as the
Caspian Region country. Through these countries it is connected to wider regions; on the west
the South Caucasus, on the east the Central Asia, and on the north the Middle East in the
south and Eurasia.7
The region is one of very few regions in the world which still can increase its oil and natural
gas production. Insofar it plays an important role and the oil consumers in Europe and Asia
are looking at the Caspian supply pattern. Europe feels the competition with China and the
Russia's interests to keep Europe out from the Caspian hydrocarbon supply.8
The Caspian region has emerged as a significant source of natural gas for world markets. The
proven natural gas reserves of Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan are
estimated at over 450 tcf, among the largest in the world and greater than those in Russia.
According to The International Energy Agency (IEA), the Caspian region’s proven and
recoverable natural gas reserves are about 7% of the world’s reserves.9 That means, The
Caspian Sea region contains about 3-4 percent of the world’s oil reserves and 4-6 percent of
the world’s gas reserves. According to BP, Turkmenistan’s proven gas reserves as of early
2010 are estimated at 8.1 trillion cubic meters (fourth in the world), Azerbaijan’s 1.31 trillion
6 Ilgar Mammadov, “Geopolitics of Energy in the Caspian Sea Region Azerbaijan’s Challenges”, The Fletcher
School, 2009, p. 13
7 Ibid, p. 14 8 Eurasia Energy Observer, Experts: Role of Caspian gas will increase in Europe's energy security, 2011
http://www.eurasia-energy-observer.com/eeo-in-the-news/experts-role-of-caspian-gas-will-increase-in-europes-
energy-security 9 Congressional Research Service (CRS), 2012, Europe’s Energy Security: Options and Challenges to Natural
Gas Supply Diversification, p. 18 http://www.fas.org/sgp/crs/row/R42405.pdf
9
cubic meters,3 Iraq’s 3.17 trillion and Iran’s 29.61 trillion cubic meters.10
In itself the
Caucasian share of global oil and gas reserves is not considerable. However, in view of the
uncertainty over the reliability of Persian Gulf supplies, as well as the possibility that Russia
may use energy delivery as a political tool, the transport of Caspian and Central Asian energy
supplies to the West through the Caucasus has gained vital importance. This makes the South
Caucasus a vital area for geo-strategy and energy security.11
However, stability in the
Caucasus is a vital requirement for the continuous transport of Caspian oil and gas.
Therefore, the importance of the region has also grown as a result of energy policies within
consumer states in the West that want to decrease their dependence on resources from Russia
and the Middle East.12
On the other hand, the South Caucasus can be considered a key point
globally as it is a transition region between East-West and North-South, and has become a
crossroads for energy transportation in Eurasia. For this reason, Turkey’s energy corridor role,
particularly with respect to the potential of the Caspian Sea basin, can be seen as crucially
important.13
Russia and Iran in Turkey’s Global Energy Strategy
Energy Relations with Russia
Russia was the second largest trading partner of Turkey in 2011 ($6 billion exports, $24
billion imports) and energy was the primary item in bilateral trade (70 percent of imports; $21
billion). As a result of that kind of a relation between these two countries, cooperation and
trade in the energy field with the RF constitutes one of the main factors of Turkey’s
multidimensional bilateral relations.14
10 Central Asian Gas Supplies to Europe Depend on Trans-Caspian Project, Trend News Agency, 19 January
2011. 11 Andrej TİBOLD, Vincent CİLLESSEN, “Geo-strategy in the South Caucasus”, Clingendael Institute, 2006,
p. 12 12 Ibid, p. 11 13 Haydar EFE, “Turkey’s Role as an Energy Corrıdor and Its Impact on Stabılıty ın the South Caucasus”, USAK,
2011, p. 120
14 Tuncay BABALİ, p. 4
10
Both Turkey and the RF attach importance to the principle of “mutual benefit” in energy
relations-any project or area of cooperation must serve the interests of both countries. Natural
gas is only one aspect of their comprehensive relations. During the Russian and Ukrainian gas
crisis of 2008 and 2009, as well as when Iran cut gas supplies to Turkey in 2007 and 2008
winters, Russia was extremely graceful and careful in supplying extra gas to the Turkish
market to remedy the possible negative impacts of shortages. This example and similar
practices later on display Russia’s loyalty to its commitment as a “reliable supplier.”15
Energy Relations with Iran
Iran is only member of the OPEC among the Caspian countries, and ranks among the world’s
top three holders of both proven oil and natural gas reserves. Also, Iran is OPEC’s second-
largest producer and exporter after Saudi Arabia, and is the fourth-largest exporter of crude oil
globally after Saudi Arabia, Russia, and Norway.16
Due to the fact that Turkey and Iran have a relation on energy. Turkey’s total demand for
natural gas more than doubled from 18 bcm in 2002 to 39.5 bcm in 2011. So too did its
electricity and oil demand. In the face of such requirements, energy constitutes one of the
most important dimensions of Turkey’s bilateral economic and trade relations with Iran.
Turkey’s cooperation with Iran should be seen from the perspective of Turkey’s need to
diversify its energy sources. Being the largest source country for oil imports (51 percent in
2011) and second largest source of gas imports makes Iran an indispensable partner in energy
for Turkey17
.
In comparison to Russia, Iran has been considered less a reliable partner for Turkey. While
Iran is Turkey’s largest oil supplier and second largest gas supplier after Russia, Ankara’s
energy and business dealings with Tehran have never been easy. Iran often demands
comparatively higher prices while gas quality and quantity often fall below the agreed terms.
After more than a decade of operation of the Turkey-Iran gas pipeline, Iran still cannot supply
Turkey’s contracted 10 bcm of natural gas a year (only in the last two years has Iran increased
its supply to the Turkish market; 6.16 bcm in 2007, 5.8 bcm in 2008, 7.7 bcm in 2010, 8.3
bcm in 2011). In both January 2007 and January 2008, Tehran slashed gas exports to Turkey
15 Tuncay BABALİ, p. 4 16 M. M. Zalloi, Oil and GAS, Strategic Regional Cooperation between Persian Gulf countries Case study: Iran's
Natural Gas Export, p. 6 17 Tuncay BABALİ, P. 6
11
because of high Iranian domestic demand. In addition, there have been problems with the
quality of the Iranian gas. Following a recent row on “take or pay” contractual obligations
regarding price and amount between the two countries, Turkey took the issue to international
arbitration. Despite these past problems and lingering concerns, Turkey needs Iranian gas to
meet its domestic demand.18
Importance of Turkey’s Existing Pipelines and Pipeline Projects for the South Caucasus
For producer countries, a diversification of export routes is important as the diversity of
energy resources is crucial for consumer countries. For this reason, Turkey plays an important
role for producer countries which currently implementing policies pursuit to diversify their oil
and natural gas export routes. In this context, South Caucasus and Central Asian states are
trying to obtain, at first, their economic and political independence, increase their oil and gas
production and diversify their export routes. Turkey, because of given its unique geostrategic
position, can enable the transport of Caspian and Central Asian energy resources to Europe,
and the world market by routes that are secure, economic and respectful to the environment.
Turkey already has the potential and the ability to meet its own needs with any one or several
of its neighbors. Turkey’s existing pipelines contribute to these countries’ supply security and
diversification of energy export routes. At the same time, Turkey is playing a role in the EU’s
energy diversification policies. Turkey’s physical location is an “advantage” both for energy
producer countries and for the EU.19
Turkey has been applying policies based upon the contribution to security of supply in the
region, by taking the leading role in the significant regional oil and natural gas projects.
Turkey seeks to improve its relations with Caucasus and Central Asian states in order to
establish an energy corridor that could bring Caspian oil and gas resources to Europe. In this
regard, the BTC and BTE pipelines can be seen to have increased regional cooperation and
prosperity.20
Turkish Energy and Natural Resources Minister Taner Yıldız said that: “Turkey actively
pursues multidirectional energy policies for the purpose of maintaining energy supply security
18 Tuncay BABALİ, p. 7 19
Taner Yıldız, “Regional and Global Cooperation in the Context of Turkey’s Energy Corridor and Terminal
Concept”, Eurasia Critic, January 2010, p. 7 20 Haydar EFE, p. 6
12
for both itself and its partners. We believe that Turkey’s importance lies in its capability and
desire to develop main transit oil and natural gas pipelines. This is why Turkey is realizing
East-West and, presently, North-South Energy Corridor…The completed Baku-Tbilisi-
Ceyhan crude oil pipeline, the Baku-Tbilisi-Erzurum natural gas pipeline and the Turkey-
Greece interconnector illustrate Turkey’s contribution to stability and cooperation in its
vicinity. By creating the “Central Asia-South Caucasus-Europe” corridor in our common
interest we are intensifying our energy dialogue with the EU, and diversification projects like
Nabucco have strategic importance, since they make it possible to export energy resources
directly to Europe, and not only to Europe, but also to Central Asia and the Caspian Sea
Region.21
Within this framework, Turkey has signed agreements to purchase gas from Russia,
Turkmenistan, Azerbaijan, Iran and Iraq, all requiring new pipeline infrastructure. The
primary objectives of Turkish foreign policy have always been that establishing and
maintaining friendly and mutually beneficial relations with Caucasus countries, promoting
regional and international cooperation, solving conflicts only through peaceful means, and
contributing to regional and international peace, stability, security and prosperity.22
Those various international pipelines bring gas to Turkey for domestic consumption, and
these could also contribute to Turkey’s emerging role as an energy transit state. Turkey
currently purchases gas from Russia and Azerbaijan, and it has negotiated repeatedly with
Turkmenistan, both for gas for its own use and for gas to flow through to Europe. The irony in
this situation is that the three Caspian littoral states are competitors for the Turkish market
while Azerbaijani-Turkmen cooperation is vital to Turkey’s success as a natural gas route,
and Russia hopes to block any potential non- Russian pipelines.23
After signing “The Contract of Century”, in September 1994 with a consortium of
international oil companies, Azerbaijan allied with its key partners in the region, Turkey and
Georgia, completed and put into operation two major pipelines; the Baku-Tbilisi-Ceyhan oil
pipeline and the Baku-Tbilisi-Erzurum natural gas pipeline, which will forever change the
21 Taner YILDIZ, P. 7 22 Selma Stern, “Turkey’s Energy and Foreign Policy”, Globalization, Vol. 3, No. 1, 2003,
(http://globalization.icaap.org/content/v3.1/03_stern.html)
23 Carol R.Saivetz, “Tangled Pipelines: Turkey’s Role in Energy Export Plans”, Turkish Studies, Vol.10, No. 1,
March 2009, p. 96
13
economic situation of the whole region and lay the foundation for a new international energy
security architecture.24
24 Gulshan Pashayeva, “The Nagorno Karabakh Conflict in the Aftermath of the Russia-Georgia War”, Turkish
Policy Quarterly, Vol. 8, No. 4, 2009, pp. 59-60
14
Table 1: Turkey’s International Pipeline Projects25
International
Project
2010 2011 2012 2013 2014
Iraq-Turkey
Crude Oil
Pipeline (HPBH)
Iraq-Turkey
HPBH
Agreement extended
Nabucco
Natural Gas Pipeline
(DGBH)
Conclusion of
the talks over supporting
agreement
Start of
Construction
(Construction)
(Construction)
Shift to First
Period of Operation
Turkey-Greece-Italy DGBH
Project
Commencement of the
construction of
Greece-Italy part (Poseidon
Pipeline)
(Construction)
(Construction)
Completion of the
construction
and Shift to First Period
of Operation
Project for the linking of
Syrian and
Turkish Natural Gas Networks
Linking of the
networks
Iraq-Turkey
DGBH Project
The bilateral and multi-sided cooperation relations with the source,
consumer and transit countries will continue.
Turkmenistan-
Turkey DGBH
Project Qatar-Turkey DGBH Project Turkey-Israel
Multiple Pipelines
Project Blue Stream 2
DGBH Project South Stream
DGBH Project Samsun-Ceyhan
HPBH Project
Source: The Republic of Turkey Ministry of Energy and Natural Resources Strategic Plan (2010-
2014)
25 The Republic of Turkey Ministery of Energy and Natural Resources Strategic Plan 2010-2014
15
Oil and Natural Gas Pipelines
Turkey is a natural geographic bridge between Azerbaijan, Iran, Iraq, Turkmenistan and
Europe. Turkey is also renowned as a reliable partner in the transportation of energy resources
in the international arena. The successful completion of projects such as the Kirkuk-Ceyhan
oil pipeline, Baku-Tbilisi-Ceyhan oil pipeline, the Baku-Tbilisi-Erzurum natural gas pipeline,
and Turkey-Greece(-Italy) Gas Interconnector projects attest to Turkey’s reputation as a
responsible and dependable partner. As a result, it is natural that Turkey is still regarded as the
most feasible and viable route both politically and economically, in transporting natural gas
from not only Azerbaijan, but also Iran, Iraq and Turkmenistan26
. In this context, there is
some important oil and gas pipelines which are in operation or projected connected with the
Caspian Sea Region for important energy markets.
1. Baku-Tblisi-Ceyhan Crude Oil Pipeline (BTC)
BTC pipeline project is the first of a series of projects that will decrease the dependency of the
Caspian region on the Russian Federation and enhance the energy security of Europe. The
pipeline is politically and economically important to connect landlocked Azerbaijan to
Western markets. BTC pipeline is one of the most important pipeline projects that increase
Turkey’s importance in terms of energy security.27
(Tabak 2009, p. 79).
The most critical part of the East-West Energy Corridor, the Baku- Tbilisi-Ceyhan Crude Oil
Pipeline (BTC) started operations on June 4, 2006, when the first oil tanker was loaded at the
Ceyhan export terminal. Thus the transfer of Azerbaijani oil to the international markets
began in 200628
. Within the scope of the Project, a nearly 1,768 km in length, with a nominal
capacity of 50 million tons/year, starting from Sangachal Terminal close to Baku-Azerbaijan
passing by Tbilisi-Georgia and reaching to the Mediterranean Sea at Ceyhan-Türkiye, has
been constructed. By the end of 2010, 1.088 million barrels of Azeri and Kazakh Oil have
been transported through BTC Pipeline to the world markets with 1,387 tankers29
(TPAO).
26 Tuncay BABALİ, p. 6 27 AYŞEGÜL TABAK, The EU Energy Security Considerations and Turkey’s Possible Membership, 2009, p. 79 28 The Republic of Turkey Ministry of Energy and Natural Resources Strategic Plan (2010-2014),
29 TPAO
16
The BTC pipeline is the first transnational pipeline that transports Caspian oil without
crossing Russian soil. It carries approximately one million barrels of crude oil per day
bypassing the Turkish Straits and also Russia, and accounts for 1.2 percent of the world’s
current daily oil needs. The BTC pipeline has great importance for connecting the East-West
Energy Corridor. BTC serves not only as a pipeline, but also connects the related countries in
terms of foreign policy and economics. It thus creates an interdependent regional system
which is important for regional cooperation and peace30
.
In January 2011, 2.9 million tons of Azerbaijani oil was transported via the Baku-Tbilisi-
Ceyhan main export pipeline. Alongside this, 225,142 tons of Turkmen oil was transported
via BTC during January.31
On the whole, 144.4 million tons of Azerbaijani oil has been
exported since the commissioning of the BTC pipeline up to February 1, 2011.32
Map: BTC and SCP pipelines
Source: TPAO
30 Hasan ALSANCAK, “The Role of Turkey in Global Energy: Bolstering Energy Infrastructure Security”,
31 “2.9 Million Tons of Azerbaijani Oil Transported via BTC in January”, 09 February 2011
32 “2.5 Million Tons Oil Exported from Ceyhan Port to the World Markets in January”, 09 February
2011,
17
2. South Caucasus (Shah Deniz) Natural Gas Pipeline (SCP)
Within the scope of SCP Project, Shah Deniz natural gas is being transported to Georgian-
Turkish border. The SCP passing through the same corridor with BTC is about 690 km in
length.
The pipeline has a transportation capacity of 9 billion m3 of natural gas to Turkish border
with one compressor station in Sangachal Terminal in line with the terms of AGSC-BOTAŞ
Sales and Purchasing Agreement (SPA). In 2010, totally 6.8 billion m3 natural gas was
transported and 4.4 billion m3 of this amount was sold to BOTAŞ. The main target of the
Project is to transport the gas that will be produced from Caspian Region to Europe through
Turkey in the future (TPAO).
3. Turkey-Greece- Italy Natural Gas Pipeline
In 2007, Greece connection of the South European Gas Ring (Turkey-Greece-Italy Pipeline),
which aims at transmitting Caspian and Middle Eastern gas resources to EU markets, was
completed an commissioned. With an annual capacity of 12 billion m³, this project will have a
significant share in Greek and Italian gas markets, and constitutes the first step in the
integration of Turkish gas system with the EU. Italian connection is due for completion in
2012 (Ministry of Energy and Natural Resources of Turkey).
4. Trans-Caspian Oil and Gas Pipeline Projects
There are two trans-Caspian pipelines that is projected to be the part of east-west energy
corridor. First one is the trans-Caspian Kazakhstan- Azerbaijan-Turkey oil pipeline and the
second one is the trans-Caspian Turkmenistan-Turkey-Europe gas pipeline project that has
been in the planning stages since 1991.33
33 Ayşegül TABAK, “The EU Energy Security Considerations and Turkey’s Possible Membership”, 2009, p. 84
18
5. Iran-Turkey Natural Gas Pipeline
This pipeline project has been planned in order to supply Turkish gas demand. It was decided
to increase Iran’s share in Turkey’s imports from 11% to 20% by 2020. The pipeline is also
intended to serve Europe via extension, thus helping to diversify Europe’s energy suppliers in
the future.34
6. Nabucco Natural Gas Pipeline
Nabucco is one of the most strategically important projects that will provide opportunity
Turkey to become the main export route for natural gas to Europe. This project aims to
transport natural gas from the Caspian and Central Asian regions to Europe via Turkey,
Bulgaria, Romania, Hungary and Austria. It is planned to have 31 billion cubic meters
capacity and to be in operation by 2011 (Tabak 2009, p. 83). However, the Nabucco pipeline
has faced numerous delays, some of them attributable to Russia’s counteroffers to build
pipelines that it asserts would reduce the efficacy of the Nabucco pipeline and to questions
about supplies for the pipeline.35
Those pipelines show that how the Caspian Region will be important in the future for the
global energy supply, especially being alternative for Russia and decreasing dependency on
Russian oil and natural gas for Europe, particularly for the EU.
If Nabuco pipeline is built, it will not significantly affect Europe's energy security. At the
same time, continental natural gas suppliers, Azerbaijan and Turkmenistan, have a great
opportunity for multi-vector export of natural gas. With integration of world gas markets, it
will positively impact diversification of gas supplies to Europe, and, most importantly,
improving trade balance of the Caspian states (Eurasia Energy Observer 2011).
34
Ayşegül TABAK, “The EU Energy Security Considerations and Turkey’s Possible Membership”, 2009, p. 85
35 Congressional Research Service 2012, p. 14
19
Conclusion
With its geographic location between large energy markets and major oil and gas producer
countries, Turkey can create an important role for itself in the global energy market. Turkey
aims to become an energy hub for east-west and north south, and to achieve its goal, is
working toward the development of new projects through bilateral cooperation to increase
prosperity and peace in the region. Turkey will be a hub country for the regional and global
energy markets and play a pivotal role in diversifying resources and routes for oil and gas
transit from neighboring countries to the EU.
Currently, Turkey is making great efforts to sustain cooperation, peace, stability and
democracy in the region, and in the future, Turkey will also play an important role in
maintaining and strengthening economic and political stability in the South Caucasus as any
destabilization in the region could seriously affect its security. At the same time, ensuring
security, stability and development in the region will facilitate efforts to transport Caucasian
and Central Asian oil and gas to Europe, and contribute to Turkey’s successful achievement
of its desired energy corridor role.
Improving the energy cooperation between Turkey and the countries of the South Caucasus
region paves the way for the establishment of a competitive and transparent market within the
Caucasian states. In this region, the strengthening of cooperation in the energy sector
contributes significantly to the importance of regional cooperation. Consequently, the
construction of these oil and gas pipelines will break the political and energy dominance of
Russia and, by linking the Caucasus and Central Asia to Europe, will be essential for the
region’s integration with the West. They will also stabilize the region by building economic
links between the countries, and trade and capital flows will increase in the region and open
up new possibilities for bilateral and regional cooperation.
20
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