TURKEY BOLSTERS ITS REGIONAL ENERGY ROLE
Walid Khadduri

Dar Al-Hayat, Lebanon
April 22 2007

Three major projects to transport natural gas from the Middle East
and the Caspian Sea via Turkey to Europe, and building two refineries
for crude oil in the Turkish Mediterranean port of Gehan are currently
in the study and design stage.

These projects are seen as a response to the US’ insistence not to
export oil and gas from the Caspian Sea area via Iran or Russia,
and the decision by the EU to diversify sources of imported gas,
particularly aimed at reducing dependence on Russian gas supplies.

Once executed, these projects, along with the (Kirkuk-Gehan)
Iraqi oil pipeline, which has a capacity of 1.6 million barrels
per day, will certainly allow Turkey – despite its low oil and gas
production levels – to play a key role in the oil industry in the
East Mediterranean area.

These three gas projects include the Trans Adriatic Pipeline to the
south of Italy, near the Brindisi port, from where it will link with
European gas network.

Construction of this pipeline is set to begin in 2008, and will
have an annual capacity of 10 billion cubic meters. Gas fields in
the Middle East, as well as the Shah Deniz gas field in Azerbaijan,
will supply this pipeline with gas.

The Greece-Italy Pipeline, also running through Turkey, supplied with
gas from Azerbaijan and Russia, reaching Turkey via the Blue Stream
Pipeline, and providing Turkey with quantities exceeding its domestic
consumption levels.

There is a future possibility of feeding this line, planned to reach
northern Italy, with natural gas from northern Iraq.

The third line, the Nabucco Natural Gas Pipeline, which delivers gas
produced from the Caspian Sea and Iran (which currently exports natural
gas to Turkey) to Austria, is estimated to cost more than $6 billion.

Negotiations over this line underwent difficulties, however, following
Turkey’s decision to temporarily suspend talks with Gaz de France,
a main partner until after the French presidential elections in
the coming days, due to the French Parliament’s vote last year for
the decision to make denying that Armenians suffered genocide under
Ottoman rule a crime.

Bulgarian, Romanian, Hungarian, Austrian and Turkish companies are
also partners in this project.

There is also the possibility of linking the pipeline in Turkey with
the Arab Gas Pipeline, which receives supplies from the northern
Egyptian border city of al-Arish via the Jordan port of Aqaba (Jordan
has completed constructing the pipeline across its territory) and Syria
(where the project is currently in progress).

Proposed projects are not limited to Turkey’s role in the transport
of gas to Europe, as a number of companies have expressed interest
in exporting oil and gas to Israel, as well.

These projects, nevertheless, have not reached the same advanced stages
as their European counterparts, where in addition to the projects
outlined here, there are plans to construct an oil pipeline to transfer
oil from Kazakhstan and Azerbaijan to Israel through the Turkish port
of Gehan, and to build two refineries there by a consortium of Turkish,
Kazakhstani, Azerbaijani and international companies.

The oil pipeline running through the Mediterranean is also expected
to be linked to the Eilat Ashkelon Pipeline to re-export oil to Asian
markets. There are also plans for a project to construct another gas
pipeline for domestic consumption.