Turkey Key Transit Partner at Strategic Energy Crossroads

Turkey will play a key role in strategic energy projects to connect European gas markets to the Caspian basin. At the Atlantic Council Energy and Economic Summit’s first session on Caspian natural gas and European energy security, top government and industry leaders discussed the benefits of pursuing pipeline projects being planned in the region.

“The energy game in the Caspian has been going on for almost two decades now and what we are seeing is a shift from a merely notional to the concrete,” Steve LeVine, Quartz correspondent and New America Foundation Schwartz Fellow, said at the summit. “There is the decision in Azerbaijan to finance and to get commercial players behind the TANAP [Trans-Anatolian] pipeline and the decision on the competition between Nabucco West and TAP [Trans-Adriatic pipeline]. We have other [gas] volumes coming out at the same time. There is a PSA that will be signed next month in Ukraine, increasing potential for offshore gas and shale gas to come [to European markets] from the Black Sea region. And there’s the potential for natural gas to come from Iraq,” LeVine continued.

As Europe moves closer to diversifying it’s gas supplies and decreasing dependence on Russia, transit countries are moving to center stage in the strategic discussion on Europe’s future energy security. “Azerbaijan is committed to developing mutually beneficial avenues for increasing [regional] energy security,” Rovnag Abdullayev, President of the State Oil company of the Azerbaijan Republic (SOCAR), said. “After ratification of parliamentary documents [concerning TANAP] in Azerbaijan and Turkey, a legal setting is in place. This could become a reality in one year…and we are finalizing preparations for full-scale overall investment of $25 billion [on projects to transport gas to Europe],” Abdullayev explained.

But Turkey is the key transit state at the strategic crossroads of energy projects coming out of the region and will play an important role in bringing partners together, according to Turkish Minister of Energy and Natural Resources, Taner Yildiz. “Nabucco, ITGI, TANAP, and TAP are important projects that will help increase security of supply for Europe,” Yildiz said. “South Stream is another project that is also important because it goes through Turkey’s exclusive economic zone [in the Black Sea]. We look favorably upon all of these projects and believe that they will complement each other in the long term,” Yildiz stated.

Industry and government representatives agreed that Turkey will play an important role in bringing partners together, but it is unclear if all of these projects can overcome the challenges of the current financial climate, as well as the political challenges that have delayed the realization of Caspian energy projects over the past 20 years. “The need for gas in Europe is [currently] more than the supply of gas in the total of these projects. But feasibility studies will show us which are realized first,” according to Yildiz. “Some were considered unfeasible in the past, but are now moving forward. Large projects always pose threats and opportunities and it is important that governments consider all aspects of projects,” Yildiz said.

Ben Priddy
Central Asian Analyst

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