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

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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

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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

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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

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

References

ALSANCAK H, “The Role of Turkey in Global Energy: Bolstering Energy Infrastructure Security”,

Journal of Energy Security (Accessed at 25 April 2013)

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