Türkiye discusses financial, technical details to bring Turkmen gas to Europe

Türkiye discusses financial, technical details to bring Turkmen gas to Europe

The details of the transportation of Turkmen gas via the Caspian Sea to Türkiye and then to Europe were discussed during President Recep Tayyip Erdoğan’s visit to Turkmenistan, where he met his Azerbaijani and Turkmen counterparts.

The president then instructed the country’s energy minister to soon meet with the energy ministers of Azerbaijan and Turkmenistan to conclude the matter “within a month without any delay.”

“We have come to a decision. Accordingly, the energy ministers of the three countries, Türkiye, Azerbaijan and Turkmenistan, will meet quickly and discuss the details of this issue,” Erdoğan told journalists returning from Turkmenistan.

Erdoğan was in Turkmenistan’s Awaza for a trilateral meeting with Azerbaijan’s President Ilham Aliyev and Turkmenistan’s President Serdar Berdimuhamedov.

Erdoğan said the issue was a topic discussed before, but now more technical matters were on the agenda along with how the financial process will be maintained.

Saying that Russia was benefitting from Turkmenistan’s gas, he pointed out that now the country does not have “its old comfort in selling Russian gas to Europe” and that Turkmenistan now has other opportunities to sell the natural gas to Europe directly or not.

“Türkiye is an important hub in selling Turkmen gas to Europe,” he said.

The issue is, Erdoğan explained, Turkmenistan needs cooperation with Azerbaijan, which has a coast in the Caspian, and that the negotiations are ongoing.

Saying that a positive point has been reached in the meetings held in the Turkmen city, Erdoğan said now it is time to solve “who and how much to undertake the financial aspect of this business while Azerbaijan and Turkmenistan take this step.”

The president said Azerbaijan and Turkmenistan need to share the burden, but if Türkiye is going to take part in this issue, “we have to undertake a financial burden as well,” or “if the European Union will take part in this business, how much will the European Union undertake?”

He also noted that at the beginning of 2023, Berdimuhamedov is expected to visit Türkiye to discuss the issue.

Erdoğan commented on the technical aspects, saying that the Trans-Anatolian Natural Gas Pipeline (TANAP), a critical project carrying natural gas from Azerbaijan’s gas fields to Turkish markets and eventually to Europe, has filled its entire volume, which is 32 billion cubic meters (bcm).

The 6 bcm-capacity Trans-Adriatic Pipeline (TAP) at the Türkiye-Greece border, transferring gas to Greece, Albania and Italy, is also working at full capacity, Erdoğan said, and for those reasons, “whether to establish a new line or not” will be discussed “so that steps can be taken accordingly.”

Turkmenistan, an observer member of the Organization of Turkish States, is among the world’s major gas suppliers. Turkmenistan has proven gas reserves of approximately 13.6 trillion cubic meters.

While the country produced 79.3 bcm of gas in 2021, it used 36.7 bcm to meet domestic needs. Turkmenistan exported 31.5 bcm of gas to China and 10.5 bcm of gas to Russia. The country also exports gas to Iran.

‘Historically important initiative’

Meanwhile, describing the transportation of Turkmenistan gas to Türkiye and Europe via the TANAP or a new pipeline as a “historic event” in terms of the energy security of Europe, which was shaken by the crisis after the Russia-Ukraine war, experts said that the continental countries should overcome the energy bottleneck and diversify their resources.

Oxford Energy Studies Institute research assistant Gulmira Rzayeva told Anadolu Agency (AA) that Turkmenistan has a large natural gas reserve and exports billions of cubic meters of gas to Russia and China every year.

Rzayeva stated that it is not cost-effective to transport Turkmen gas as liquefied natural gas (LNG) first to Azerbaijan and then to Türkiye and Europe via TANAP. Still, it is more convenient to make this shipment by constructing a pipeline.

Rzayeva, who pointed out that the scope of this initiative, may require additional investments in gas production areas in Turkmenistan’s facilities in the land and the Caspian Sea, stated that Turkmenistan was willing to sell natural gas before, but could not take any steps in this regard due to pressure from Russia.

“Today, this historical idea has been implemented. I call it a historical event,” she said.

Noting that Turkmenistan gas can be transported with a consortium consisting of Turkmenistan, Azerbaijan and Türkiye with a volume of 10 bcm at first, Rzayeva expressed that Turkmenistan gas may be more suitable for Türkiye than other gas supply countries, considering the cost.

Rzayeva stated that if Turkmen gas is procured at an affordable price, Türkiye’s hand will become stronger against other countries from which it buys gas.

“More gas can be supplied from this source in the future, up to 30 bcm, as Turkmenistan has such potential. This, of course, can be delivered to Europe through Türkiye,” she said.

Rzayeva noted that it may be possible in the long term for Türkiye to turn into a hub where gas prices are determined and big gas companies invest, such as the TTF, the Netherlands-based virtual natural gas trading point, and said, “Türkiye will buy Russia’s gas, Turkmen gas and if it procures LNG and exports them to Europe. This could turn Turkey into a major gas exporter, perhaps at least as important a gas exporter as Russia.”

‘Europe needs to support’

Sohbet Karbuz, the oil and gas director of the Union of Mediterranean Countries Energy Companies, also speaking to AA, described the summit on Turkmen gas as a “good development” and said that the amount of gas to be shipped from Turkmenistan and Azerbaijan should be clarified.

Karbuz noted that in the next steps, the necessary technical and infrastructure investments should be made to be able to ship gas, and this means a certain amount of time and cost.

“Europe should support this because the Southern Gas Corridor is a priority project for Europe,” he said.

Emphasizing that natural gas to be purchased via Azerbaijan and Türkiye is much more logical for Europe than buying LNG from the U.S. or relying on the spot LNG market, Karbuz said: “It is a much safer solution for Europe. Even in the current conjuncture, every billion cubic meters is important for Europe.”

Expressing that Southeast European countries need a reliable country and corridor and that this initiative can be the solution, Karbuz stated that Europe’s main problem is to create new gas supply branches to the countries that are most dependent on Russia on the continent.

Drawing attention to the supply problems of these countries, Karbuz said: “Not all of them have access to LNG, especially the Balkans, Romania, Bulgaria, Ukraine. This initiative is much more important for them,” he said.