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Turkish Nat. Gas Price to Remain Unchanged in Near Term

The price of natural gas is not forecast to change in the near term, Energy and Natural Resources Minister Fatih Donmez said Friday. Highly dependent on foreign natural gas imports, Turkey last saw a gas price increase of 14.9% on Aug. 31.

Donmez explained that gas prices are indexed to oil prices, which have fluctuated in recent months, and have been impacted by recent sanctions and the fall out from the Saudi drone attacks. "In recent months, it is mostly geopolitical events, like embargoes on Iran and Venezuela, that pushed oil prices higher. We believe such one-sided embargoes have a negative impact on energy-dependent countries like Turkey," Donmez told Turkish television NTV in an exclusive interview.

As natural gas prices, which are indexed to crude oil prices, also lag six months behind price changes, Turkey will watch the market and price dynamics closely in the medium- and long-term for any potential changes, he said.

- Gas storage projects

To ensure energy security, the country is taking steps to expand the country's gas storage facilities. Turkey consumes close to 50 billion cubic meters (bcm) of gas every year, and has additional storage under construction at the Salt Lake (Tuz Golu) natural gas storage facility, located in central Anatolia.

Tuz Golu has a capacity to store 600 million cubic meters (mcm) of gas, and has another 600 mcm of capacity under construction with plans to reach 5.4 bcm by 2023-24.

In addition, the gas storage facility, near the industrial heartland of Istanbul, in the Silivri province, has a capacity of 2.8 bcm but targets a total gas storage capacity of 4.6 bcm by 2023, Donmez added. "When you combine Tuz Golu and Silivri projects' target storage capacities, they will add up to 10 bcm, equivalent to 20% of Turkey's annual consumption," he said.

To complement the gas storage facilities, the minister added that Turkey has added two liquefied natural gas (LNG) terminals in Turkey. While Turkey's first Floating Storage Regasification Units (FSRU) was launched in Aliaga, Izmir in December 2016; a second FSRU was launched in Hatay - a province in the Mediterranean region in early February.

Turkey also has two major gas pipeline projects that will help to meet its energy demand and supply gas to neighboring countries. Donmez said the TurkStream natural gas pipeline, which will carry gas from Russia to Turkey and Bulgaria, is making "very fast progress," with its completion expected by the end of 2019. One of the two pipelines will be connected to Turkey's power grid, and the other will reach Europe.

The second phase of the Trans Anatolian Natural Gas Pipeline Project's (TANAP), from Eskisehir in central Anatolia to Edirne in the Thrace region, is "almost complete," he added. The project will be an integral part of the Southern Gas Corridor that will carry gas from Azerbaijan to Italy.

"Both these projects will provide energy security for Turkey and the region," the minister said.

- Nuclear power

With much of its gas use dependent on foreign sources, Turkey is trying to decrease the amount of its energy consumption with the launch of two nuclear projects. Akkuyu nuclear power plant, located in southern Turkey, is on schedule with its first reactor due to come online in 2023, the 100th anniversary of the foundation of Turkish Republic, Donmez said.

On the other hand, the Sinop nuclear plant project in northern Turkey saw its collaboration with its Japanese partners end recently. "When Japan's feasibility report came, costs were higher than anticipated, so we ended the process. But we will continue a strong economic relationship with Japan. We will resume the nuclear project in Sinop, however, we don't know yet what country or which technology that will be with," Donmez explained.

After Turkey's largest city Istanbul witnessed a 5.8-magnitude earthquake on Thursday, the minister assured that every security precaution is being taken for Akkuyu's construction. "Nuclear facilities are critical everywhere in the world. Their security is calculated by measuring the smallest amount of risks," he said.

- Earthquake security

During the earthquake's aftershocks on Thursday, 22 electricity transformers were automatically shutdown and once electricity controls were conducted, electricity was fully restored in the entire city, with no problems encountered with natural gas flows, he said. Donmez, who was an executive at Turkey's Gas Distribution Industry and Trade Joint Stock Company (IGDAS) during the magnitude-7.4 Marmara earthquake in 1999, said "many regulations and standards were revised" since the tragedy that killed around 18,000 people and left almost 50,000 others wounded.

"Today, all gas flow is cut by valves in buildings during an earthquake. It is important for individuals to manually cut their natural gas valves and electricity before leaving their households during and right after an earthquake," he warned. The minister noted that earthquake valves in electricity lines and gas pipelines operate at 0.3G -- when a building is exposed to a shock that is equal to a 30% change in the earth's gravitational pull.

(Anadolu Agency)

EVENTS Energy & Development 2019

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