Turkiye Century Energy Summit designed to showcase nation's role as future gas hub for consumers

By News Center

The Turkiye Century in Energy Summit was held on January 30 at the Four Seasons Bosphorus Hotel under the auspices of the Ministry of Energy and Natural Resources and under the leadership of Albayrak Media.

Many popular names and companies from the energy sector attended the summit with a keynote address by Minister of Energy and Natural Resources Fatih Donmez.

The event was sponsored by RHG Enertuk Energy, Koza Gold Operations, Turkish Airlines, Turk Telekom, Vakifbank, Vakif Katilim, and Ziraat Bank and supported by BOTAS, EnerjiSa, EPIAS, ETI MADEN, Kalyon Enerji, Komur Isletmeleri A.S., Smart Gunes Technologies. The summit was broadcast live on TVNET, TVNET Radio, and the Yeni Safak YouTube channel.

On the fringes of the event, Turkiye signed a natural gas purchase agreement with Oman that will be valid for the next 10 years.

According to Donmez, a delegation from the Turkish government-owned energy company BOTAS traveled to Oman to finalize the agreement under which Turkiye will purchase 1.4 billion cubic meters (bcm) of gas from Oman each year.

Donmez said at the Century of Turkiye in Energy Summit that the agreement with Oman also offers the possibility of being extended further if necessary.

“At a time when the world, especially Europe, is suffering from gas supply problems, Turkiye is taking all steps to become a gas trade center,” he said.

Turkiye is almost entirely dependent on imports to cover its energy needs, which leaves it vulnerable to rising costs that skyrocketed following Russia’s invasion of Ukraine. Domestic demand has increased since the pandemic. Turkiye imports gas mainly from Azerbaijan, Russia, and Iran, as well as liquified natural gas (LNG) from Qatar, the USA, Nigeria, and Algeria.

After Russia, a major gas producer, invaded Ukraine in February last year, the world gas markets were upended. In response, many nations, including those in the European Union, imposed sanctions on Russian exports, and Russia also stopped supplying Europe through pipelines.

Meanwhile, Turkiye is set to start pumping the natural gas it discovered in the Black Sea into the national grid by the end of March. It has gradually discovered about 710 bcm of natural gas since August 2020, which is estimated to have a market value of $1 trillion (TL18.81 trillion).

The current reserve, according to Donmez, is sufficient to meet Turkiye's demand for 30 years; however, as the nation's hydrocarbon explorations increase, this number may rise.

About 10 million cubic meters (mcm) of gas per day is expected to be transferred in the initial phase, while the infrastructure has been set up to enable this figure to peak at 40 mcm through 2026.

“The first phase of the Black Sea gas will come into operation towards the end of March, and we will be able to meet one-quarter of our gas needs at full capacity production from here,” Donmez noted.

“This means that Turkiye’s gas imports will have decreased by one quarter.”

Turkiye’s annual gas consumption rose from 48 bcm in 2020 to a record 60 bcm in 2021. President Recep Tayyip Erdogan said it was expected to stand at around 53.5 bcm in 2022.

Earlier estimates had put the figure at up to 63 bcm, but the power generated from renewable resources this year drove the gas consumption downward.

Donmez also declared that Turkiye’s third floating liquefied natural gas storage and regasification unit (FSRU) is projected to arrive in Turkiye within a week and that the ship has taken its first cargo and started sailing.

The ship will serve at the Saros FSRU terminal, which will also give the country the flexibility to carry out LNG transport, especially during the summer season when the demand to pump gas into the system is low.

"With the Saros FSRU, we will add a new entry point to the Thrace region, where consumption is high. More importantly, we will become a more active player in the regional gas trade, especially in the Balkans, in line with our gas hub target," Donmez suggested.

The first step, he said, was taken with Bulgaria in this context, as the agreement includes an annual gas supply of approximately 1.5 bcm to Bulgaria until 2035, corresponding to 30 percent of the country's annual gas consumption.

The agreement between Bulgaria’s state gas company Bulgargaz and BOTAS, signed earlier this month, will give Bulgaria access to Turkiye’s gas network and LNG terminals to help bring in supplies.

"In addition to Bulgaria, we are carrying out similar processes with North Macedonia, Romania, and Moldova," Donmez said.

In October, Russian President Vladimir Putin proposed setting up a gas hub in Turkiye following explosions that damaged Russia's Nord Stream gas pipelines under the Baltic Sea.

Putin suggested developing transshipment and exchange terminals for Russian gas, potentially making Turkiye a significant center for sales of Russian gas to third countries.

Erdogan backed the idea and the two countries instructed authorities to work on a roadmap, which is expected to be announced soon.

Donmez also said Turkiye would hold a natural gas summit on February 14-15 to bring together gas supplier countries and Europe's consumer countries in Istanbul.

"We will bring together supplier countries from the Middle East, Mediterranean, Caspian, and Middle Asia with consumer countries from Europe," the minister noted.

Turkiye has the infrastructure and experience in gas trade and authorities are taking steps for it to be a hub where regional benchmark prices are set, Donmez said.

"Our target is to bring together supplier and consumer countries and become a gas-trading center where the benchmark price of gas is set," he added.

Along with the energy ministers, the summit is expected to host high-level representatives of public institutions and organizations, the private sector, and international energy organizations.

"The event will discuss the impact of global developments on the energy sector, changes in supply and demand and pricing, and global supply security issues," Donmez concluded.