The works for the creation of the gas hub in Turkey will start within a year, they assure from Ankara. But the project has raised a lot of doubts among experts. Here’s which ones and why
The Turkish Energy Minister, Fatih Dönmez, has said that Turkey expects to launch the project for the creation of a natural gas hub in the country within a year.
The idea had been proposal last October by Russian President Vladimir Putin to his Turkish counterpart Recep Tayyip Erdogan. The Kremlin plans to make Turkey not a simple distribution center for Russian gas to Europe, but a real regional hub “that determines the prices” of fuel, similar to the Amsterdam FTT.
THE CLARIFICATIONS OF THE TURKISH ENERGY MINISTER
However, Dönmez specified that the Turkish hub will not only manage gas from Russia, but from various suppliers: Ankara, therefore, is “negotiating both with Russia and with other unspecified countries”. The minister explained that Turkey already has a “contractual collaboration with Moscow. We buy this gas because we need it. We need new contracts and new suppliers for this market,” he said, referring to the hypothetical hub.
Turkey consumes around 55-60 billion cubic meters of gas. Therefore, as acknowledged by Dönmez himself, “new contracts are needed to export and sell gas in Europe”.
WHAT ERDOGAN SAID
A week ago Erdogan has said that the price of Russian gas sent to Europe will be determined by the hub in Turkey, as soon as it is realised.
THE TURKSTREAM PIPELINE
The TurkStream pipeline, which connects Russia and Turkey via the Black Sea, already supplies fuel to Bulgaria, Greece, North Macedonia, Romania, Bosnia and Herzegovina, Serbia and Hungary. Active since January 2020, it has a capacity of 31.5 billion cubic meters per year, significantly lower than that of Nord Stream 1 (over 59 billion cubic metres), the important pipeline between Russia and Germany which supplies the European market.
IS THE GAS HUB IN TURKEY FEASIBLE?
The specialized site natural gas intelligence he wrote that, in order to turn Turkey into an export gas hub, Russia will have to increase the capacity of pipelines to the country, which is currently inadequate for the purpose.
Moscow, therefore, will have to build new pipelines in the Black Sea and towards south-eastern Europe. But the works could take over ten years to reach the combined capacity of the two Nord Stream pipelines (damaged by explosions in late September), or 110 billion cubic meters.
Russia’s state-owned gas company Gazprom actually floated the idea of expanding TurkStream to 63 billion cubic meters a year. But given the sanctions, which prevent Moscow from accessing Western technologies and services, the company may not have the technical means to carry out the work: the pipe-laying vessels employed in the Baltic Sea for the construction of Nord Stream 2 may not be effective in the sea Black, given the much greater depth of the seabed.
WILL THE TURKISH GAS HUB BE COMPETITIVE?
Furthermore, in order to establish itself, any gas hub in Turkey will have to offer competitive costs: in a context of reduced gas consumption, given the energy transition, only the least expensive supplies will be able to remain on the market.
The Turkish gas hub may not be able to guarantee this price competitiveness. The costs of transporting the fuel from Thrace (where the pole is expected to be built) to the Baumgarten hub in Austria, and from there to north-western Europe, are considered quite high by experts.
Furthermore, the European Union, which is the destination market for Russian gas passing through Turkey, has developed a plan – called RePowerEU – to become independent from Russia for supplies of fossil fuels before 2030.
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