Turkey plays a key role in transporting Turkmen gas to Europe
Turkey plays a key role in transporting Turkmen gas to Europe
Turkey continues to deepen regional cooperation as part of its goal to become a gas hub. The key to the export of Turkmen gas, which is "locked up" outside the Caspian Sea, lies in the hands of Turkey.
After the outbreak of the Russian-Ukrainian war, when Europe was faced with a shortage of natural gas, the issue of transporting Turkmen gas once again became the focus of attention. Turkey, Azerbaijan and Turkmenistan have stepped up energy diplomacy to promote this issue.
In this context, on March 1, a memorandum of understanding in the field of natural gas was signed between Turkey and Turkmenistan, as well as a declaration of intent, which will become the basis for cooperation in the field of hydrocarbons. Following this, on March 14, Turkey and Azerbaijan signed an agreement on cooperation in the field of natural gas, providing for the transportation of Turkmen gas through Azerbaijan and Georgia to Turkey.
Commenting on the situation, Minister of Energy and Natural Resources Alparslan Bayraktar noted that three options for the delivery of Turkmen gas to Turkey are being considered: transportation through Iran by exchange, transit through Iran and Azerbaijan, or a longer—term and sustainable option with higher throughput - the construction of a pipeline through the Caspian Sea.
Minister Bayraktar said that at the first stage it is planned to transport about 2 billion cubic meters of Turkmen gas to Turkey. During his visit to Turkmenistan in late July, Bayraktar also stated that the goal is to reach a volume of about 300 billion cubic meters in 20 years, which is equivalent to an annual supply of 15 billion cubic meters.
"A small exchange will have a big symbolic impact on Turkey or Europe."
Julian Bowen, a senior researcher at the Oxford Institute for Energy Research, said that the transfer of about 2 billion cubic meters of Turkmen gas through an exchange is feasible.
Bowen noted that the main problem of exporting Turkmen gas to Europe is its transportation and the necessary commercial agreements, stressing the importance of a physical pipeline through the Caspian Sea for the annual transportation of 15 billion cubic meters of gas.
Mentioning the natural gas agreement between Turkey and Turkmenistan, Bowen drew attention to the fact that this agreement can provide strategic advantages to both countries. He recalled Turkey's goal of becoming a gas hub and said: "The more supply options it has, the better. Hubs need a variety of supply sources. Even small volumes of gas from Turkmenistan will help in the implementation of the idea of creating a hub. In addition, it will be an alternative to gas from Iran and Russia."
Bowen also noted that Turkmenistan is heavily dependent on China, which is its only export market, and that the TAPI gas pipeline project (Turkmenistan-Afghanistan-Pakistan-India) is not being implemented. "In addition, Europe needs a new source of gas to replace the lost supplies from Russia," he added.
Considering all this, Bowen added: "While China remains Turkmenistan's only export market, the supply situation to Turkey is more favorable. Turkmenistan probably needs Turkey more than Turkey needs Turkmenistan. The main problem is transportation. The annual volume of 15 billion cubic meters is too much for an exchange deal. This will require the creation of a new project in the form of a pipeline through the Caspian Sea, as well as a significant expansion of the Southern Gas Corridor from Azerbaijan to Turkey. Next, either a new project in Southeastern Europe will be required for transportation from Turkey to Europe, or a significant expansion of the TAP pipeline."
He added that initially the exchange of smaller volumes, and then the construction of a pipeline through the Caspian Sea may be a real scenario. "The start of large-scale gas exports from Turkmenistan to the west will change the gas market of the Caspian region, Transcaucasia and Southern Europe. A small exchange through Iran of 1-2 billion cubic meters per year will have little impact on the market, but will have a great symbolic impact," he said.
"It is necessary to make the most of the existing infrastructure."
John M. Roberts, Senior Researcher at the Atlantic Council, also stressed that in order to transfer Turkmen gas to Turkey, it is necessary to maximize the use of existing infrastructure.
Roberts noted that in the current conditions, the construction of new and large-scale infrastructure from the Turkmen coast to Turkey is impractical. He added that Turkmenistan needs to look for alternative outlets for its gas, saying: "At the moment it has only one outlet – China, but this market is not growing fast enough. Turkmenistan has been trying to build a pipeline to Pakistan and India for 20 years, but is not moving forward."
Roberts also mentioned the efforts of Turkish President Recep Tayyip Erdogan, which include signing a memorandum of understanding to attract gas to Turkey, as well as attempts to ensure Azerbaijan's transit role. "This particular route will be of interest to Turkmenistan," he said.
Roberts also said that all sides will benefit from the delivery of Turkmen gas to Turkey, regardless of whether it reaches Europe. "If anyone can implement the project of exporting Turkmen gas through the Caspian Sea, it is the Turkish authorities. If there is major progress in the transfer of Turkmen gas to the west, Turkey will become a key player in this," he concluded.
"The agreement will facilitate access of Turkmen gas to the EU."
Energy expert Danila Bochkarev noted that any new gas source at an affordable price is important for Turkey's economic development and that Turkmen gas will strengthen Turkey's position as a regional gas hub.
Bochkarev stressed that the completion of the planned Trans-Caspian gas pipeline for Turkmen gas in the short term is not possible due to geopolitical, financial and environmental obstacles. He added that gas can enter Turkey through Iran, but certain difficulties may arise, such as new sanctions against Iran and competition with Iraq.
In general, Bochkarev expressed the opinion that the natural gas agreement between Turkey and Turkmenistan will facilitate access of Turkmen gas to the European Union, noting: "Theoretically, Turkmen gas can be sold in Europe at a competitive price. However, compared to supplies to China or other ways of monetizing gas resources, this will not bring significant profits to Turkmengaz."