Turkey strategic route for European energy markets

The Ukraine crisis highlights Turkey's importance as a politically stable route for natural gas bound for European markets.

Turkey strategic route for European energy markets

World Bulletin / News Desk

Turkey is emerging as a strategic transit route for natural gas after the Ukraine, experts agreed in Washington D.C. on Monday during an energy conference held by the Brookings Institution, a foreign affairs think-tank.

Senior energy experts discussed Turkey’s energy policy, the importance of natural gas to the Turkish economy, the prospects for Turkey as a gas transit and emerging trading hub, and the energy dimensions of Turkish-U.S. relations, in a Brookings session entitled "Turkey’s Energy Security Calculus: Aspirations and Realities".

Gareth Winrow, an independent energy expert and a former professor with Istanbul-based Bogazici University, said Turkey has become more important as an alternative energy route to Europe since the violent political turmoil engulfed Ukraine.

Turkey imports three-quarters of its energy and 98 per cent of its natural gas, of which Russia supplies 60 per cent. Turkey serves as a natural geographical bridge between Europe and Asia, and endeavors to become an energy hub, through which Eastern energy can be supplies to global markets - largely European. A net energy-importing Turkey also strives to diversify its energy supply by bidding to attract Caucasian and Iraqi sources to and through its own borders via pipeline projects.

Nuclear power will not be a significant source of Turkish energy for some time yet, and Turkish coal reserves include lignite which is rich in sulfur and low quality, therefore natural gas will remain as the primary energy choice for Turkey in the near future, Winrow said. Turkey does not want to strain relations with Russia over the crisis in Ukraine, since they are the main gas supplier for Turkey, Winrow said, adding that the Israeli and Iraqi sources of natural gas are worthy alternatives to Russia.

The recent discoveries of natural gas fields in the Eastern Mediterranean off the coast of Israel have introduced opportunities for Ankara, as Turkey is most feasible route for Israeli gas to reach European and Asian markets. Strained relations between Ankara and Tel Aviv over the Mavi Marmara incident in 2009 are expected to thaw as both sides have signaled possible reconciliation. Turkey is also tries to mediate a resolution between the federal government of Iraq and the semi-autonomous Kurdish Regional Government of Northern Iraq, which will allow Kurdish natural gas to reach Turkey for re-export and domestic consumption.

BOTAS, a Turkish state-owned company responsible for gas and oil pipelines, is set to play a vital role toward Turkey's realizing aspirations of becoming an energy hub. Winrow says BOTAS needs structural reforms to effectively pursue these aspirations.

Turkey has emerged as one of the fastest growing energy markets in the world as a result of "economic development, population growth and urbanization," said Muharrem Yilmaz, head of TUSIAD, an influential Turkish business association.

Turkey is one of the biggest natural gas markets among the OECD member states, said Yilmaz. "By 2030, Turkey will be the third largest natural gas market in Europe."

Energy security is vitally important for Turkey, which has significant growth targets but has limited reserves of hydrocarbon resources, said Yilmaz, adding that Turkey has an opportunity for steady supply and resource diversification, given the region surrounding Turkey holds 68 per cent of the global natural gas and 75 per cent of global oil reserves.

Last Mod: 29 Nisan 2014, 13:19
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