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    Categories: 2020

Experts skeptical about Turkey’s latest gas discovery

Arab News


By Menekse Tokyay


ANKARA: As Turkey recently announced a major natural gas discovery in
the Black Sea on Friday, how this will translate into reality is being
widely discussed.

According to President Recep Tayyip Erdogan, the discovery of 320
billion cubic meters (11.3 trillion cubic feet) of natural gas in
Turkey’s exclusive economic zone will reduce the country’s dependence
on foreign energy supplies, especially from Russia, Azerbaijan and
Iran — a factor that constantly increases the country’s current
account deficit.

Last year, Turkey’s energy imports cost the country $41 billion, while
it consumed 45 billion cubic meters of gas in the same period.

Mehmet Ogutcu, head of the Bosphorus Energy Club and a former
diplomat, told Arab News that a “98 percent import dependency and $12
billion annual gas import bill creates a challenge to Turkey’s economy
and national security.”

The country is also conducting exploratory drilling for oil and gas in
the eastern Mediterranean, that could hold about 122 trillion cubic
feet of gas by some estimates, but these moves have enraged regional
actors over maritime rights and further strained Turkey-EU relations.

Turkey plans to extract and make this gas available by 2023 — when the
country will hold its parliamentary and presidential elections.

But, some experts have voiced their suspicions over this goal, and
whether this reserve is likely to meet Turkey’s energy needs, claiming
that the initial production process will require six years at minimum.

Some commentators also doubt the plan’s viability, as several members
of the government have made similar announcements in the last two
decades.

According to Ogutcu, the reserve estimate needs to be independently verified.

“The 2023 goal seems to be too optimistic as the Black Sea has tough
geological and climate conditions for exploration and production.
Plus, the average period from discovery to market is around 7-8 years
in the gas industry,” he said.

Getting gas to the public is also believed to require additional
financial resources reaching to billions of dollars in infrastructure.

Ogutcu thinks that investor appetite is currently low, over the gas
glut in international markets, low demand and correlating prices.

Another point of contention is that the plan could shorten the terms
of Turkey’s contracts with Iran and Russia for energy supplies that
will end in 2023 and 2026 respectively.

Aydin Sezer, an expert on geopolitics and energy, said it was not
technically possible to announce a reserve through a single drilling.

 The country’s drilling ship Fatih began work on July 20. Sezer
believes it ought to take four to six months to be technically
suitable.

“The site of the discovery in the western Black Sea — now renamed the
Sakarya Gas Field — expands 250 square kilometers, and at least 8 to
10 drillings should have been conducted in this area in order to
announce a realistic amount of reserves. The real reserves can be
determined in two years at least and could be extracted in 7 to 10
years,” Sezer told Arab News, adding that the announced reserves could
not be taken as commercially viable at this point.

According to Sezer, the reserves cannot be extracted completely, and
even if they were would only meet the country’s energy needs for six
years.

On the other hand, as the gas found is 3,500 meters deep, reaching and
extracting natural gas beyond 500 meters will require US companies
that are specialized in deep water extraction technology.

Madalina Vicari, an independent expert on energy geopolitics, thinks
the gas discovery is important for the country’s energy security, but
not a game changer in the sense of covering Turkey’s gas import needs.

“The discovery is in ultra-deep waters, and ultra-deep water drillings
bear significant challenges, technical and economic alike, as they
require special engineering projects, and intensive capital
investments,” she told Arab News.

In this regard, for Vicari, it is yet to be seen how much gas is
recoverable, and when exactly the gas will flow into the Turkish
market.

“Given the challenges of the project, it would likely take at least a
few years until the gas reaches consumers. The 2023 timeline is overly
optimistic. It remains to be seen to what extent the Sakarya field
will reduce Turkey’s gas imports,” she said.

Vicari also thinks that Turkey’s energy contracts with Russia may turn
into shorter term contracts along with significant price bargains,
while the new gas discovery is also a challenge for the Turkstream
pipeline.

“And Russia, in order to not have at least one of Turkstream’s lines
idle, might offer significant price concessions,” she added.


 

Shushan Frangulian: