Sosyal Medya


The Turkish-Bulgarian gas deal: Is Turkiye becoming an energy hub?

Mohammad Nadimur Rahman

The Bulgarian and Turkish energy ministers signed a 13-year gas deal on 3rd January 2023 in the Bulgarian capital Sofia. According to the agreement, Bulgaria can access Türkiye’s liquefied natural gas (LNG) terminals and its pipeline network. Turkish energy minister Fatih Dönmez said in the press conference after signing the deal, ‘The memorandum of understanding (MOU) will be an important step in increasing the natural gas supply security of the Balkan region up to around 1.5 billion cubic meters of gas that can be transferred annually. This can make a serious contribution to the security of supply in Europe, especially in Bulgaria.’ Türkiye has already started its investment in LNG for a short time. The country is trying to diversify its own energy sources, and the US is already its biggest supplier.

The Bulgarian president made a short trip to Türkiye last month, where he was eager to make a new deal for the natural gas supply that was cut off by Russia because of the Ukraine-Russia war. Although Bulgaria made a new deal with Greece for which the natural gas will be transferred from Azerbaijan through Türkiye, it is now enough for Bulgaria in order to fulfil their demand. The energy minister for Bulgaria said, ‘thanks to this agreement, we have the opportunity to buy natural gas from all natural gas producers in the world. We will also be able to benefit from the amount of gas that will reach Türkiye. Türkiye already made an extension to an underground gas storage facility in Istanbul during the last month. Moreover, Türkiye is planning to sign up for becoming a regional hub. Despite the country having few resources, it is trying to overcome these obstacles with agreement and investment. To that end, the Turkish government is actively promoting the country as a potential hub for negotiating energy deals.

Two years ago, Turkey discovered the Black Sea’s most significant natural gas reserve: 710 billion cubic metres. Turkish president Recep Tayyip Erdoğan said, ‘This gas is worth around a trillion dollars in the international market.’ The energy and natural resource minister of Türkiye Fatih Dönmez hoped that this reserve would reduce the dependency on foreign countries, especially in energy consumption. Currently, the natural gas that Türkiye imports from the outside world is worth around 40 billion per year. However, new energy policies initiated by the government are expected to cut down the current energy dependency on various countries, including Russia and Iran.

After Russia’s gas supplies to Europe were disrupted by Ukraine-related sanctions and suspected blasts that damaged the Nord Stream pipeline in the Baltic sea, Türkiye is planning to establish a gas distribution centre in its Thrace region which could turn the country into a gas hub for Europe. In fact, Russian President Vladimir Putin also proposed this plan to Türkiye. He said, ‘We might consider the perspective of building yet another gas pipeline system and creating a gas hub in Türkiye in order to sell natural gas to other countries. At present, Türkiye and Russia have two active pipelines, including TurkStream and BlueStream. The TurkStream pipeline, which started its operations in 2020, carries Russian gas to Southern Europe through the Black sea and Türkiye, allowing Moscow to bypass Ukraine as a transit route to Europe. It has an annual capacity of 31.5 billion cubic meters and consists of two 930-kilometre offshore lines and two onshore lines 142 and 70 kilometres long, respectively. On the other hand, the BlueStream pipeline was the first direct gas pipeline between the two countries under the Black sea that was built to meet Türkiye’s gas needs. This pipeline has a capacity of 15.74 billion cubic meters that extends through Türkiye and carries gas to several European countries, including Serbia and Hungary.

Meanwhile, the TurkStream pipeline is expected to be the main route for Russian gas deliveries in Europe after halted gas deliveries to Germany through the NordStream pipeline. The Turkish president said, ‘Russian and Turkish energy authorities will work together to designate the best location for a gas distribution centre.’ The government authorities also expected to locate this hub in the border area, especially the border with Greece and Bulgaria. The projects will highlight Türkiye’s key role in Europe’s energy needs and allow the country to regulate gas prices. Russian President Vladimir Putin said, ‘In the course of working on this hub that we could create, together this would be a platform for not only energy supply, but also for price determination because of the importance of pricing issues.

Meanwhile, seven international natural gas pipelines are passing through Turkiye. It also has two onshore and two offshore liquefied natural gas facilities and two underground natural gas storages. In fact, Turkiye is connected to the natural gas of three countries through seven pipelines and receives liquefied natural gas to four LNG terminals in Turkiye from more than ten countries all over the world. According to Turkish officials, the country is on the right track to becoming an energy hub for which it can supply natural gas to those countries based on their demands. It was also agreed in a joint meeting between Ankara and Russia to export Russian natural gas through Turkiye, for which the current energy crisis in Europe might be reduced.

Turkiye also has a total of 5.8 billion cubic meters of gas storage, from which 4.6 billion cubic meters are at Silivri while 1.2 billion cubic meters are at Salt Lake. These two storage facilities are both full and together can meet almost 10% of the gas that the country demands. These two facilities’ total natural gas capacity is expected to double within 2023. As Turkiye is still importing gas from countries like Russia, Iran and Azerbaijan, the current natural gas obtained from these two storage facilities was kept as a backup. All this evidence indicates that Türkiye can be the hub for supplying natural gas to Bulgaria and other European countries.

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