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On August 21, 2020, Turkish President Recep Tayyip Erdogan addressed the nation with a
live broadcast.
He announced the largest natural gas field discovery in the country's history.
The announcement gave off the impression that this could mean Turkey, which currently is
dependent on gas imports, could now become a key energy player itself.
But the question remains, how much of this has been exaggerated and to what extent this
discovery really is a game changer.
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Let’s first look at the current energy situation in the country.
Turkey is in close proximity to countries for which the export of energy sources is
of enormous importance.
Russia, which has a coast on the Black Sea has the largest amounts of natural gas reserves
in the world.
And Iran, which borders Turkey in the east, holds the second largest natural gas reserves.
Iraq is hugely economically dependent on the energy industry as almost all of the country's
exports are crude oil.
In Azerbaijan, 91% of all exports are mineral products.
In contrast, the Turkish economy is much more diverse, but the country is dependent on imports
for its energy supply.
30 percent of the country's electricity is obtained from natural gas, which will be the
focus in this video.
A small part of this gas is imported from Algeria, Nigeria and Qatar by ship.
For this purpose, the gas is cooled to a liquid state, at which its volume is significantly
smaller.
In addition to these liquid gas imports a number of pipeline projects play a crucial
role in the region.
Since 2006, natural gas has been pumped from Azerbaijan to Turkey via Georgia using the
South Caucasus Pipeline.
From the Turkish city of Erzurum onwards this pipeline joins the Tabriz-Ankara pipeline
which transports natural gas from Iran into the country.
However, the largest trading partner for gas is Russia.
For over 30 years, gas has been transported overland to Turkey using the Trans Balkan
Pipeline.
Ukraine, Moldova, Romania and Bulgaria are involved as transit countries in this project.
But this overland route also requires these nations to be involved in the gas supply which
is regulated by transit agreements in which these countries hold a good negotiating position.
And often times these contracts includes high transit fees.
In order to avoid this situation two further pipeline projects were created in the Black
Sea.
Blue Stream which was inaugurated in 2005 and reaches the mainland at the Turkish city
of Samsun.
And TurkStream which reaches the mainland in the north-west of the country not far from
Istanbul.
This pipeline was inaugurated in January of this year by the presidents of the two countries,
Putin and Erdogan.
The project offers strategic advantages for both countries.
Thanks to these pipelines, Russia is Turkey's most important gas supplier.
Around half of Turkish gas imports currently come from Russia.
And the TurkStream pipeline provides further capacities.
In addition, the balance of power is changing along the Trans Balkan Pipeline.
Ukraine's negotiating position on further transit agreements with Russia has been weakened.
That’s because Turkey can be supplied directly.
And the Trans Balkan Pipeline has been upgraded so that gas can also flow in reverse.
So it would be possible to pump gas from the TurkStream pipeline via Turkey to Bulgaria,
Romania, Moldova and Ukraine.
Which in turn puts Turkey in a position where it might be able to re-export gas and become
a transit country itself.
The project fits in with Russia's larger strategy to avoid Ukraine as a transit country.
Both nations are facing off in a dispute over the status of the Crimean peninsula and the
Donbass region.
And since many years both countries are in a conflict over the gas transport.
In the past, Ukraine received 3 billion USD annually in transit fees, which have repeatedly
triggered disputes.
With Russia at times shutting of the gas supply as a means of pressure.
Ukraine is not only an important intermediate country for Russian gas exports to Turkey,
but also for gas exports to Western Europe, which Russia is working towards avoiding with
the newer Nordstream and Nordstream 2 pipelines.
And the loss of this central role in gas supply in the region is seen as a threat to national
security in Ukraine.
The many complex political relationships play a decisive role in Turkeys gas supply.
Turkey finds itself in a situation in which the country, despite being surrounded by gas
exporters, is still struggling not to become too dependent on any individual nation.
Because of its political instability, Iraq does not yet play a role in the Turkish portfolio.
The same goes for Syria in the south.
In addition, competing pipeline projects through Syria, for example to transport natural gas
from the Arabian Peninsula can almost certainly be ruled out due to the close ties between
the Syrian government and Russia.
And the gas import from Iran are also subject to a certain political uncertainty due to
the US sanctions, which aim to dissuade nations from trading with Iran.
Even if these sanctions do not currently affect the Turkish-Iranian gas trade, it still creates
some political uncertainty.
And between Turkey and Russia there are a number of different positions in international
conflicts, such as on the territorial disputes between Armenia and Azerbaijan, on the status
of Kosovo, as well as the two countries different positions amidst the Syrian civil war.
Relations between the countries were particularly strained following the shooting down of a
Russian military plane by Turkish military near the Turkish-Syrian border in November
2015.
In recent years, however, the relationship has largely returned to normal.
Nevertheless, Turkey wants to avoid becoming too dependent on Russia.
So Turkey is looking for natural gas reserves that are within their own control.
Specifically in two areas.
In the Eastern Mediterranean, which we will go into in more detail in a future video,
and in the Black Sea, where a major discovery has now been announced.
The field is Tuna-1, and is said to have a capacity of 320 billion cubic meters of gas.
For comparison, in 2019 Turkey consumed 43 billion cubic meters of gas.
So at least in theory, this field could meet the country's gas needs for a solid 7 years.
According to President Erdogan, this should mark the beginning of a change towards more
independence in the countries energy supply.
And production at this gas field is scheduled to start as early as 2023.
But there is also a great deal of skepticism surrounding these announcements and whether
that timeframe is realistic.
So far it is not known how complex the extraction will be.
The development has to be financially viable in order to compete with the price of gas
that is currently being imported from Russia.
The big announcement may also have something to do with the government trying to to send
a positive signal in the context of a difficult economic situation.
The covid19 pandemic has hit the Turkish economy and the national currency lira is at an all-time
low compared to the dollar.
On the other hand, this discovery definitely has political implications.
Because it strengthens Turkey's negotiating position for future talks with its major gas
suppliers.
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