Istanbul In Zonguldak, an inhospitable old industrial town on Turkey’s Black Sea coast, President Recep Tayyip Erdogan wants to win the election – with natural gas. In April, Turkey will feed natural gas from its own continental shelf in the Black Sea into the domestic grid for the first time in its history. The facility will be inaugurated this Thursday.
More than 710 billion cubic meters of natural gas are to be stored here. That’s more than enough to supply your country with natural gas for 15 years. But the government has bigger plans. “We hope to export some of the natural gas to Europe,” says Melih Han Bilgin, CEO of the state-owned oil company TP.
This is an important turnaround for energy importer Türkiye with a chronic current account deficit. And for Erdogan a key example of the achievements of his AKP party.
Turkey has been paying 97 billion US dollars annually for energy imports alone. “Annual expenditure on natural gas in Turkey amounts to around 12.5 billion dollars,” according to an analysis by the FDP-affiliated Friedrich Naumann Foundation in Istanbul. “That could now save $4 billion to $5 billion annually, reducing total spending by at least a third.”
The Sakarya natural gas field will produce 10 to 15 million cubic meters per day in its first phase. That would already be enough to heat all residential buildings in the country. In the second phase, the amount pumped should increase to a peak of 40 million cubic meters per day by 2028, says TP CEO Bilgin. The amount would almost correspond to the entire natural gas consumption in Turkey.
Turkey can’t dispel Europe’s natural gas worries with this, but it can at least mitigate them to some extent. A gas shortage in the coming winter cannot be ruled out. Russia halted major pipeline gas flows to the European Union after invading Ukraine.
Especially smaller countries in the Balkans, which are dependent on Russian supplies and consume less than heavyweights like Germany, could in future get gas from Turkey instead of Russia. This would reduce the political pressure exerted by the Kremlin on the countries in south-eastern Europe.
Türkiye signed gas deal with Bulgaria
And so the government of head of state Erdogan is already thinking loudly about selling the natural gas to other countries. “Bulgaria could get natural gas from the Black Sea,” says TP boss Bilgin.
The poorest EU member, Bulgaria, was almost exclusively dependent on Russian natural gas supplies for years. In April 2022, shortly after the start of the Russian war of aggression in Ukraine, the government in Sofia refused Moscow’s demand that energy imports be paid for in the Russian currency, the ruble. Since then, Bulgaria has been desperately looking for alternatives.
>> Read here: Türkiye and Russia – Moscow’s fear of alienation
In early January, Bulgaria and Turkey signed an agreement. Accordingly, Bulgaria can transport up to 1.5 billion cubic meters of natural gas or liquid gas from third countries into its own country via Turkish terminals. Now Turkey can also offer to supply its own gas to Bulgaria.
The infrastructure is in place: several pipelines connect the gas fields in Turkey and Azerbaijan with potential customers in south-eastern Europe. Other countries in the Balkans could therefore also benefit from Turkish gas. Even before the start of the Ukraine war, the Republic of Moldova had a dispute with Russia about natural gas supplies and is looking for alternatives.
Hungary and Russia signed a 15-year contract for the supply of up to 4.5 billion cubic meters of natural gas in 2021 and confirmed it in April. Despite the war in Ukraine, the government in Budapest is backing Russian natural gas, but could be fined by the European Commission. Because Russian natural gas reaches Hungary via the Turkish Turkstream pipeline, Hungary too could soon switch to Turkish natural gas.
The Serbian government, which maintains good contacts with the Kremlin, also wants to diversify its gas supply and is building a pipeline to Bulgaria, which is being co-financed by the EU. And the energy supplier SPP in Slovakia also wants to further reduce its dependence on Russian natural gas.
Türkiye could become a natural gas hub
Exploiting the natural gas field would strengthen Ankara’s negotiating position in the international natural gas market when new contracts are signed. “The country seems to be moving in the direction of reducing energy dependency and diversifying its resources,” summarize the authors in the analysis by the Friedrich Naumann Foundation.
“By exporting natural gas, we strengthen our negotiating position and could even play a role in setting the price of natural gas in the region,” says TP CEO Bilgin.
At the same time, Turkey also wants to become a trading hub for imported natural gas, as announced by Turkish Energy Minister Fatih Dönmez. “Our goal is to bring supplier and consumer countries together and become the gas trading center where the benchmark price for gas is set,” he said a few weeks ago.
>> Read here: Erdogan surprises with a foreign policy change of course
Almost four years passed between the discovery of gas and the opening of the new offshore pipeline in the Black Sea. The Turks developed the project with Schlumberger, the world’s largest company for oil exploration, and the engineering company Subsea 7, which specializes in the oil industry. The actual construction time was twelve months, explains the construction manager of the project, Murat Acar. “I’ve been involved in many projects around the world,” he says. “But it’s never been so fast.”
According to CEO Bilgin, the investment volume amounts to 1.8 billion US dollars, which Turkey should catch up with in the first year of exploitation of the gas field.
More: Campaign Aid From Washington – Türkiye Receives F16 Parts