On Jan. 24, Turkey’s ambassador to Azerbaijan, Erkan Özoral, announced that the construction of Turkey’s Trans-Anatolian Pipeline (TANAP) was ahead of schedule. Now expected to be operational in 2018, TANAP is the keystone in Ankara’s ambition to enhance Turkey’s strategic position by becoming the main clearinghouse for Middle Eastern and Central Asian natural gas to reach Europe. However, the welcomed news for the visionary pipeline project may have been upended a week later by the announcement of impending new natural gas discoveries in Egypt. If new Egyptian gas finds are announced in 2017, then Turkey’s carefully crafted regional energy diplomacy may have to be recalibrated.
TANAP is the main pipeline for the Southern Gas Corridor extending from Azerbaijan
to Greece, Albania and Italy and is earmarked to transport natural gas from the Caspian Sea to the European Union. With the inclusion of natural gas from the Kurdish region of Iraq and Israel
(which would have to cross Cyprus’ exclusive economic zone), the Turkish market would then become a chief organizing framework for the distribution of natural gas from the Caspian Basin and Middle East to Europe. Given sufficient domestic market reforms, Turkey could even become a regional energy hub, with all the economic benefits and political clout that being an energy hub entails.
However, Ankara’s ambition to position Turkey as a regional energy player in the greater eastern Mediterranean region became more complicated on Feb. 2 when Egypt’s oil minister, Tarek el-Molla, publically indicated that Egypt may announce new discoveries of natural gas during the second half of 2017. Along with the oil minister’s remarks, Mohamed el-Masry, the chairman of the state-owned Egyptian Natural Gas Holding Company, told reporters in Cairo that Egypt would start exporting natural gas in 2019.
In 2015, Italian energy giant Eni announced the discovery of the Zohr natural gas field in the Shorouk concession off Egypt’s coast. The largest gas find in the eastern Mediterranean, Egypt’s Zohr field contains 850 billion cubic centimeters of natural gas, although not all of it is recoverable.
While most of the gas produced at Zohr is slated for Egypt’s domestic market, new finds of recoverable natural gas in the Shorouk concession could supply Egypt’s dormant liquefied natural gas (LNG) plants. Natural gas supplies from any new finds, especially if combined with gas from neighboring suppliers such as Israel
and Cyprus, could indeed render Egypt a net natural gas exporter and significant supplier of LNG to Europe
The strategic picture for Turkey is further complicated by Russia’s recent acquisition of a major stake in Egypt’s gas industry. On Dec. 12, 2016, Eni agreed to sell a 30 percent stake in the Zohr field to Russia’s Rosneft for US$1.575 billion, making Moscow the second largest stakeholder in Zohr. As Egyptian President Abdel Fatah el-Sisi’s office stated, Moscow’s acquisitions of a share of the Zohr field was part of Cairo’s commitment “to cooperate with Russian
companies in all spheres, including [the] oil and gas sector[s], taking into account the immense experience and potential of Russian
While TANAP will turn Turkey into a strategic transit corridor for non-Russian natural gas to reach the EU, competing Egyptian LNG exports to Europe
may hamper Turkey’s hopes of becoming a regional energy hub. Russia’s growing involvement in an expanding Egyptian natural gas industry will likewise impact a range of thorny issues from the Turkish Stream project to the Cyprus reunification negotiations. As 2017 progresses, Ankara’s energy diplomacy will likely be challenged once again to adapt to rapidly changing geostrategic conditions of the region.*Dr. Micha’el Tanchum is a fellow at the Energy Policies Research Center at Bilkent University in Ankara.