Turkey, Azerbaijan deal to transfer gas to Europe

Turkey, Azerbaijan deal to transfer gas to Europe

Turkey, Azerbaijan deal to transfer gas to Europe

Turkish Energy Minister Taner Yıldız (2nd R) and his Azeri counterpart Natig Aliyev gesture during a signing ceremony for the Trans-Anatolia natural gas deal in Ankara. AA photo

Yesterday’s landmark natural gas project deal between Turkey and Azerbaijan threatens Nabucco’s future, the lingering plan to carry the Caspian resources to energy-hungry Europe, according to many sector professionals.

The $5 billion Trans Anatolian pipeline project, which will carry 16 million cubic meters of Azeri gas to Turkey, does not mean shelving Nabucco, said Turkish Energy Minister Taner Yıldız. “[The Trans-Anatolian] project does not mean abandoning those projects. This project does not leave any excuse on transportation or feasibility for the producer countries and projects as being an important alternative pipeline,” he said yesterday during the signing ceremony in the capital city of Ankara.
Yıldız was referring to other projects such as Nabucco, the Trans Adriatic Pipeline (TAP) and Interconnection Turkey Greece and Italy (ITGI).

However a number of professionals interviewed by the Daily News disagree.

“Nabucco has become of second importance with this project,” Tuğrul Ekin, energy professional and head of Turkish-Eurasian Business Councils, said during a phone interview yesterday. “Both pipelines [Trans Anatolian and Nabucco] are not viable at least for the next five years. You have to solve the resource problem in the first place.”

Speaking on the possible three gas resources Erkin said, “Azerbaijan cannot feed the Trans Anatolian pipeline alone as it does not have enough gas.”

The two other possible suppliers, Iran and Iraq, are not viable either due to stability issues, said Erkin. “You need at least five years to put such projects into operation.”

Still, it is more possible to realize Trans Anatolia with respect to Nabucco because it is easier for parties to settle on Trans Anatolia, he said.

“At first sight, the Turkish part of Nabucco project will not stay as it was planned,” said Cenk Pala, an energy expert and former strategy department head at Turkey’s state-run pipeline company BOTAŞ. “If Libyan and Algerian gas can be transported through Italy to Europe, this will also affect Nabucco negatively.”

However, a positive move for Iraqi gas in three years’ time may revitalize Nabucco, Pala said.
Ferruh Demirmen, a petroleum consultant based in Houston, Texas, wrote in a recent article that the Trans Anatolian project was a blow to Nabucco.

“From the outset Nabucco was stymied by lack of throughput gas. Over time, the construction of the pipeline was repeatedly delayed, the cost increased sharply to as much as 14 to 15 billion euros ($20 billion), the potential creditors held back their credit guarantees, and competing projects emerged, ITGI and TAP, both designed to reach Italy.”

Trans Anatolia means Azeri gas will be connected to Nabucco not from Georgian but from Bulgarian border, said Yıldıs. “We are planning projects not only for Azeri gas, but also other supplies that will still be transferred through Azerbaijan.”

“The Trans-Anatolian pipeline will carry 16 billion cubic meters of natural gas of which 6 billion cubic meters are reserved for Turkey,” Natig Aliyev, Yıldız’s Azerbaijani counterpart said.

Total capacity could be increased to 24 billion cubic meters soon, he said.

Voicing a similar optimistic view on Nabucco, Mehmet Kazancı, a businessman in the energy sector, told Daily News that “Both Trans Anatolia and Nabucco projects may be viable in the future.” Kazancı also heads the sector association Gazbir.

Citing Europe’s gas need will rise rapidly to 750 billion cubic meters in 10 years from 500 billion today and the shutdowns of nuclear and coal plants on the continent, Kazancı said he believes there will be a vast demand from Europe.

As for the gas supply Kazancı said Turkey can solve any political problems regarding the Trans Anatolia project in the region to sustain supply security and pipelines.

Two thirds of the 6,500 kilometers long Nabucco pipeline is planned to cross Turkey. Austria, Hungary, Romania, Bulgaria, Germany and Turkey are cooperating in much discussed Nabucco pipeline project.
Trans Anatolia envisages sale of Azerbaijani natural gas in Turkey as well as in Europe via Turkey.

Servet Yeşiyurt and Hüseyin Hayatsever contributed to this report