EMBASSY OF REPUBLIC OF KOREA
ENERGY NEWSLETTER
26.08.2015
Map-1. Southern Gas Corridor (SGC) Map with possible future pipelines
Map-2. Turkish Stream Map
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Map-3. Turkey’s Major Oil and Natural Gas Transit Pipelines
Map-4. Turkey’s Strategic Role in the Global Oil and Gas Trade
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The Trans-Adriatic Pipeline (TAP) is a part of $45 billion Southern Gas Corridor (SGC) will transport natural gas from the giant ‘Shah Deniz 2’ field in Azerbaijan to Europe. The approximately 870 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy. The pipeline’s initial capacity will be 10 bcm annually and can be expanded to 20 bcm. TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Statoil (20%), Fluxys (19%), Enagás (16%) and Axpo (5%). Lisa Givert, the Head of Communications of TAP told that Trans Adriatic Pipeline AG (TAP) will conclude several large contracts this year, including onshore and offshore pipeline construction, compressor stations and pipelines. Givert added that the TAP expects funding from multilateral institutions such as European Bank of Reconstruction, etc. as well as some number of commercial lenders. Earlier the European Investment Bank (EIB) announced on its website that it was considering lending 2 billion euro ($2.23 billion) to the project company in charge of TAP. The project is said to be one of the 33 priority energy security Projects of Common Interest. The loan has not been approved yet.
The bank is currently considering the possibility of allocating a loan but it has not been approved by the Board of Directors of the bank.
Resource: AzerNews
Resources:Dunya Newspaper, Enerji Enstitusu, Enerji Gunlugu
Trans-Adriatic Pipeline
Iran to Cooperate with Azerbaijan in SGC
Mahmoud Vaezi, the Iranian Information and Communications Technology Minister, who also co- chairs the intergovernmental commission for economic, trade, and humanitarian cooperation between Iran and Azerbaijan, said that his country plans to export gas not only to Asian markets, but to Europe as well. Vaezi added that Iran will be cooperating with Azerbaijan on gas transportation to Europe via SGC. Some talks have been held with Azerbaijan’s energy minister and other authorities.
Vaezi also stated that officials from both countries are constantly negotiating on the gas sector, and the negotiations will continue. The Minister noted “At present, Azerbaijan is supplying gas to the Nakhchivan Autonomous Republic through swap operations with Iran. On the other hand, at a certain time, Azerbaijan’s demand in gas increases, and we can meet it. In turn, during certain periods, there is gas shortage in Iran, which can be covered by Azerbaijan.”
Resource: AzerNews
Map-5. Southern Gas Corridor (SGC) Map SCP: South Caucasus Pipeline; TANAP: Trans-Anatolian Pipeline; TAP: Trans-Adriatic Pipeline
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As is known, the shareholders of BTC Co. are as follows: BP (30.1%), AzBTC (25%), Chevron (8.9 %), Statoil (8.71%), ТРАО (6.53%), Eni (5%), Total (5%), Itochu (3.4%), Inpex (2.5%), ConocoPhillips (2.5%) and ONGC (2.36%). The pipeline’s capacity is 1.2 million barrels of oil per day.
Transportation of Turkmen oil through BTC started in July 2010. Transportation of Turkmen oil via BTC is carried out in accordance with the contract signed between SOCAR Trading and Dragon oil which is engaged in oil production in Turkmenistan. SOCAR Trading buys crude oil from producers in Turkmenistan, delivers it across the Caspian Sea to Baku, where in Sangachal terminal there is an entrance flange of the Baku-Tbilisi-Ceyhan pipeline. BTC Co. transports this oil through the BTC and hands it over to SOCAR Trading at the Mediterranean port of Ceyhan.
Baku-Tbilisi-Ceyhan oil pipeline transported 3.7 million metric tons of Turkmen oil in Jan.-July 2015, The volume of the oil transported in the same period of the previous year was recorded as 3.1 million metric tons according to Azerbaijani State Statistical Committee. BTC transported 5.6 million metric tons of Turkmen oil in 2014 and 3.3 million metric tons in 2013.
Resource: AzerNews
Turkmen Oil Transport via Baku-Tblisi-Ceyhan Oil Pipeline Turkish Stream
Some improvements have been noted about the Russian initiated Turkish Stream Project.
Russian media reported that the foreign ministers of Hungary, Serbia, Macedonia and Greece might sign a memorandum this autumn for construction of a gas pipeline named ‘Tesla’, which is seen as a continuation of the ‘Turkish Stream’. The pipeline with a length of 1,300-1,400 km and the estimated capacity of 27 billion cubic meters, will be laid from Turkey to Austria’s Baumgarten hub. The route of this new pipeline is very similar to the Nabucco West pipeline. It is important here to note that Tesla pipeline will be a rival of TAP. However a representative from the foreign ministry of Hungary stated that the Tesla pipeline is designed not only for Turkish Stream but also for TANAP gas pipeline.
Similarly the energy minister of Greece, Mr Skurletis, said that the Tesla pipeline is not a rival for TAP but an attempt to diversify the energy routes within Europe..
While above-mentioned four countries signed the memorandum fort he continueing pipeline of Turkish Stream in Europe, Fitch ratings stated that it is possible Turkish Stream Project to be delayed due to political crisis in Ukraine and the attempt of EU to diversify from Russian gas.
On the other hand, Mr Vladimir Putin spoke in an openning ceremony and guaranteed that Russia will succesfully undertake all the current energy projects.
According to Russian newspaper Vedomosti, Gazprom is talking to Italian Eni in order to include Saipem again in the Turkish Stream Project. Eni owns 46% of Saipem’s shares. This movement is interpreted as Russia’s willingness to start the construction immediately after the contract is signed with Turkey.
Resource: AzerNews, Enerji Gunlugu, Enerji Enstitusu, Fitch,
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Salt Lake Natural Gas Underground Storage Facility
As is well known, Turkey is a natural gas importing country which makes the natural gas storage facilities a very important issue, especially in Winter months.
Additionally, in order to be an energy hub, the importance of having enough storage capacity cannot be denied is clear. However, Turkey lacks natural gas storage facilities.
In 2006 and in 2014, via the loan contracts signed between BOTAS and World Bank, the Salt Lake underground storage facility is funded by the World Bank.
Currently, 65% of the facility is completed and the first phase that consists of 6 storage units is expected to be commissioned in 2017. The facility in total comprises 12 storage units. The whole facility is expected to be completed by 2019.
The capacity of 12 units will be 1 bcm and daily 40 mcm of natural gas can be pomped to the Turkish natural gas system.
Resource: Enerji Gunlugu An explosion has
damaged a section of the Baku-Tbilisi-Erzurum (South Caucasus pipeline)
gas pipeline in the Sarikamis region of Turkey’s Kars province,
the Anadolu Agency reported on August 25.
Gas supply through the pipeline has been
suspended.
According to the agency, the explosion was
arranged by PKK.
Manfred Leitner from Austrian energy company OMV stated that the company might sell its natural gas power plant in Samsun.
According to the “Project Financing Statistics”
published by the Turkish Banks Association, the majority (53%) of the loans given are recorded to be for the energy projects.
According to the Russian media, Russia will sell natural gas to its strategic partner Armenia at a price level of 165 USD/tcm, valid from 1st January 2015. Turkey paid 377 USD/tcm for the first quarter of 2015 to Gazprom.
