Turkey’s Gas Supply to the European Union
Turkey is ready to sell more natural gas to the European Union, but it requires long-term commitments in order to justify the necessary infrastructure investments. Our southern neighbor also prefers to handle this without the complex swap deal that the EU insists on, in order to avoid relying on Russian gas deliveries, said the country’s Minister of Energy, Alparslan Bayraktar, to Bloomberg. Europe is seeking alternative gas supplies to replace the Russian streams that pass through Ukraine.
Gas Exchange Agreement between Moscow and Kiev to Expire in 2024
The gas exchange agreement between Moscow and Kiev is set to expire at the end of 2024. Some options being considered include redirecting Azerbaijani gas to Turkey towards Europe and replacing those quantities with additional deliveries of Russian gas to the Turkish market. Turkey, in particular, is more interested in expanding exports through Bulgaria, as noted by Bloomberg.
“We need this guarantee from you – 10 years, 15 years, whatever it may be, you have to give something,” said Bayraktar to the agency, calling the proposal for gas exchange in Europe “complicated.” “These discussions are being held without knowledge of…”
Increasing Capacity of Turkey-Bulgaria Interconnector
The minister announced plans to increase the capacity of the Turkey-Bulgaria interconnector in order to meet the growing demand for gas in Europe. Currently, the interconnector is only able to pump half of the 7 billion cubic meters of gas that Turkey can technically supply annually. The minister suggested that Ankara could collaborate with the Azerbaijani company SOCAR to increase this volume to at least 10 billion cubic meters, but he also emphasized the need for guarantees regarding demand in Europe. He pointed to agreements such as the one between Turkey and Bulgaria last year as examples of successful partnerships in the region.
Flexibilizing LNG imports in Europe
European countries are considering a new approach to importing liquefied natural gas (LNG) in order to increase flexibility. This strategy involves importing up to 1.5 billion cubic meters of LNG and re-exporting it to the West, providing a more adaptable solution to meet energy demands. However, this proposal has raised concerns in Brussels, where the EU competition watchdog is reviewing the agreement due to fears that it may contradict fair competition practices, as reported by Bloomberg.
Bulgaria’s negotiations for gas access
Under the current agreement, Bulgaria is obligated to pay nearly $500,000 per day for access to Turkey’s gas network. However, Bulgaria is seeking to renegotiate the deal in hopes of allowing a third party to utilize the supply rights due to the high costs involved. These negotiations are crucial for ensuring energy security and affordability in the region.
Challenges in European Gas Supply
Recent reports from energy consultancy agencies confirm that there are diplomatic disputes in the search for a substitute for Russian gas supplies to Europe. Experts at Energy Aspects Ltd. believe that the political and physical barriers are too high to replace Russian gas passing through Ukraine with Azerbaijani gas. Analysts also point out that it will be difficult for Azerbaijan to increase internal production significantly to provide additional supplies to Europe in the coming year. Meanwhile, Turkey aims to become a regional gas hub.
Turkey’s Investment in Natural Gas Infrastructure
Turkey has made significant investments in new underground gas storage facilities and terminals for liquefied natural gas (LNG), as well as exploration and production in the Black Sea. Despite being almost entirely reliant on imports to meet domestic demand, the country signed several small-volume export agreements with Romania, Moldova, and Hungary last year. Ankara is also exploring the possibility of importing gas from Turkmenistan, currently through a swap arrangement via neighboring Iran, said Bayraktar, adding that he hopes to reach an agreement during a visit there later.
These investments are part of Turkey’s efforts to enhance its energy security and reduce its dependence on external suppliers. By diversifying its sources of natural gas and expanding its infrastructure, Turkey aims to ensure a stable and reliable supply of energy for its growing economy and population. The country’s strategic location at the crossroads of Europe and Asia makes it a key player in the regional energy market, with the potential to become a major hub for natural gas trade in the future.
Turkey Signs LNG Agreement with Exxon Mobil
Last month, the Turkish company Botas signed an agreement with the American company Exxon Mobil for the delivery of up to 2.5 million tons of LNG annually for 10 years. The Minister stated that he hopes to announce this agreement and contracts with other companies in the coming days.
Europe’s Shift Away from Russian Fuel
As Europe tries to distance itself from Russian fuel following the invasion of Ukraine, Moscow remains the largest supplier of gas to NATO member Turkey, while Ankara is trying to maintain relationships with both sides in the conflict, according to the agency.