Koreans to invest in Turkish energy sector

Koreans to invest in Turkish energy sector

Koreans to invest in Turkish energy sector

Prime Minister Recep Tayyip Erdoğan hugs South Korean President Lee Myung-Bak as Emine Erdoğan (R) looks on after a warm meeting held in Istanbul yesterday. AA photo

South Korea will sign a preliminary pact to build power plants in Turkey in a deal worth about $2 billion, Yonhap News reported, citing an unidentified official at South Korea’s presidential office.

The project will involve building a new coal-fired power plant and upgrading existing ones, according to Yonhap.

The news came amid discussion on Turkey’s dependence on natural gas in electricity production as Energy Minister Taner Yıldız signaled over the weekend a new strategy to focus on coal-burning facilities.

The agreement will be signed in Turkey today between South Korea’s SK Energy, Korea South-East Power and Turkey’s state utility Electricity Generation Co., Inc. (EÜAŞ), according to the report.

South Korean President Lee Myung-bak’s meetings in Turkey, which started Feb. 4, also continue today.
Lee could also sign a framework agreement on nuclear cooperation or ink a deal on Turkey’s second or third nuclear power plant, one Turkish official told Hürriyet Daily News on Jan. 29.

Shift to coal-burning plants

The share of natural gas in electricity generation remains at nearly 50 percent, said Yıldız at an EÜAŞ meeting in the northwestern province of Bolu on Feb. 4.

“We are aiming to reduce it down to 30 percent in 2023,” he said, noting that it would not be easy to reach the goal.

The Energy Ministry readies to launch incentives to support investments in coal-burning power plants. “The government will give coalfields for free to energy firms generating electricity from coal,” Yıldız said.
“Regarding investments in generating electricity from natural gas, we will bring some restrictions,” he said.

The restrictions will be announced gradually this year, he added.

Responding to the questions on the insufficient gas supply from Russia via the Westline Pipeline, Yıldız said, “The reason behind the matter is the extreme cold in Turkey. Some say this is the coldest winter in the last 42 years.”

The heavy snowfall and cold weather last week across the country badly affected daily life. Turkey’s demand for natural gas per day rose to 186 million cubic meters recently from 171 million cubic meters last year, according to Yıldız.

The dependency on imported natural gas triggers the country’s chronic current account deficit problem.
Russian Gazprom, Turkey’s biggest gas importer, said Feb. 4 it could pump additional gas to Western Europe including Turkey amid a cold snap after European Union officials and energy firms said Gazprom had dropped gas deliveries in several states.

“We are pushing our limits to provide the additional gas for Turkey by delivering more above the limits of the contracts between two countries to ensure that the country would not face any problem,” said Russian President Dmitry Medvedev on Feb. 4, according to daily Hürriyet. Russia provides nearly 6 to 8 million cubic meters per day to Turkey, according to Medvedev, the daily reported.

‘Iranian gas costs too much’

Responding to questions on Turkey’s lawsuit against Iran to the International Court of Arbitration because of short natural gas supply from Iran, Minister Yıldız said Iran’s price among the five countries was the highest.

If Turkey’s eastern neighbor would not lower the gas price, going to the International Court of Arbitration over the issues seemed “inevitable,” he said.

“Our request for cheaper gas from Iran starts from June to August. … Russia so far reacted positively, but not Iran,” said Yıldız. “We have respect for both choices, but as the energy minister I have to think about the price of the natural gas that my people purchase.

“We might apply to the International Court of Arbitration next week,” Yıldız said.

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