Reducing gas imports with discovery 'big success' for Turkey: Expert
Any opportunity to reduce import dependence will be considered a big success, and Turkey's latest natural gas discovery cumulating in 540 billion cubic meters of reserves will help, according to Thomas Purdie, a research analyst at Wood Mackenzie.
Purdie said that the success in the Amasra-1 well will help Turkey alleviate its overwhelming dependency on gas imports, which account for 99% of demand and contribute to an energy import bill that has regularly exceeded $40 billion per year.
Based on official figures, reserves in the Amasra-1 bring the Black Sea volumes in 2020-21 to 540 bcm, which if 100% recovered, would cover 12 years of Turkey’s current gas demand.
With the ongoing appraisal of the giant Sakarya discovery and new exploration wells by Turkey’s own drillships, Purdie said it is likely that Turkey’s Black Sea resources will grow, which is likely to attract the attention of industry players.
"To take full advantage of the recent success, Turkey must shift its strategic focus to developing the volumes already discovered. Turkey has proven its deepwater Black Sea acreage is highly prospective. Other operators have likely taken notice too, opening a potential avenue for collaborative exploration," he said.
Purdie foresees Turkey’s stronger bargaining position when renewing its pipe gas imports from Azerbaijan, Iran and Russia, giving it more ability to push for lower prices, lower volumes and greater contract flexibility.
Turkey has over 40 bcm of expensive import contracts, with oil-indexed pricing, up for renewal in the 2020s and another 20 bcm up for renewal by the end of 2021
This is already evident in the current talks with close partner Azerbaijan for the renewable of a long-term contract that expired in April, he said.
He advised that the strategic focus should be on the development of the volumes already discovered to be able to achieve the arduous 2023 target for production start.
"That means consistent progress offshore - with wells and pipelines - and onshore at the gas plant site at Filyos. The phased development plan is now clear. But a 2023 date for first production still looks ambitious, even from the smaller-scale Phase One. Reaping the supply rewards on such an accelerated timeline remains complex and expensive, no matter the political and economic importance," he explained.