Too early for shale gas boom in Turkey, says IEA's Birol

by Ergin Hava | Today's Zaman

It would be a big surprise if Turkey experienced a significant turnaround in shale gas production, similar to that in the US, in the short term, the International Energy Agency's (IEA) chief economist said at a conference on Friday in İstanbul, adding that it is too early to say whether shale gas production will be financially viable for the country.

Speaking on the sidelines of the 19th Energy and Environment Fair and Conference (ICCI), Fatih Birol said Turkey has “golden opportunities to be a crucial player in global energy markets within the next five years.”

“The issue of shale gas production is very new in Turkey. There are serious studies in this regard; however, we have not yet learned whether this type of unconventional energy will be competitive enough in Turkey,” Birol explained. The IEA official added that despite early feasibility studies, it is not still clear if the cost of shale gas extraction will be cheaper when compared to simply importing natural gas from suppliers in the region. “We would welcome a US-like shale gas revolution in Turkey in the short term; this, however, would be a big surprise for us,” he added.

Excitement over the prospect of trillions of cubic meters of shale gas in Turkey has kept the country's agenda busy in recent years as these estimates mean that Turkey, which is almost completely dependent on foreign countries for fuel resources, could finally be energy independent. However, observers warned that this field of the energy sector is still in its infancy in Turkey and that it is impossible to get a truly accurate picture of the country's shale reserves at this point. Royal Dutch Shell and US company TransAtlantic Petroleum Ltd. are among the leading firms that have already commenced studies for shale gas extraction in eastern and western Turkey, respectively.

On the one side, going by the shale gas production boom, many market experts believe the US is likely to replace Russia as the world's number one gas producer. Others, like the Canada-based Centre for Research on Globalization (CRG), think the shale gas sector in the US is “a gigantic hyped confidence bubble that is already beginning to deflate.”

Israel sees ‘Med-Streams’ in service of regional diplomacy

by Sevil Küçükkoşum | Hürriyet Daily News

 

Building a pipeline that will carry Israeli gas to Turkey would enhance political normalization between two countries, Israeli envoy says, contrary to Turkish efforts to separate two processes

Transferring Israeli gas through Turkey to the international market is profitable for both Turkey and Israel and cooperation in the energy field could pave the way for resolving regional problems, a senior diplomat from the Jewish state said, as he apparently referred to probable normalization of bilateral relations between Turkey and Israel with the help of such cooperation at a bilateral level.

 

“We should start thinking at least about a set of Med-Streams, a set of pipelines and LNG that will enable us to exploit not only oil and gas, but also to create another political environment,” Ambassador Michael Lotem, special envoy for energy of the Israeli Foreign Ministry, said yesterday, referring to prospects of building of a pipeline from Israel to Turkey.

 

“Can we use energy; can we use gas, beyond the commercial value of it, in the service of politics, in the service of diplomacy?” Lotem asked in a speech delivered at the second and last day of the 12th Turkish International Oil & Gas Conference (TUROGE).

 

“I say that we should… and if we are talking about [it], especially for Turkey, for Europe,” the Israeli ambassador said, citing the BTC project, which he describes “a valued example of how an energy project can initiate geopolitics.”

 

Lotem was among the speakers in a session on the East Mediterranean as part of a panel titled “Potential Sources of Alternative Supplies – Regional Developments.”

Can Turkey Leverage Kurdish Crude?

by Denise Natali | Al-Monitor

The proposed energy framework between Turkey and the Kurdistan Regional Government (KRG) has raised hopes for independent Kurdish oil exports and a viable way to pay international oil companies (IOCs) in the Kurdistan Region. Some think the framework could eventually give the Kurds an alternative revenue source that replaces Ankara for Baghdad as the region’s financier. Yet, while encouraging Kurdish energy development, Turkey still has made no clear commitment to an independent pipeline that would circumvent Iraqi state sovereignty. This is because Ankara’s endgame is not only securing Kurdish crude, but maximizing Turkish commercial interests in Iraq. Doing so will likely entail negotiations with Baghdad that include Erbil, but which prioritize Iraq’s territorial integrity, secure Ankara’s interests and seek concessions from the Kurds.

Turkey’s quest for Kurdish crude is not surprising, given its geographical proximity to the region, domestic energy needs and growing influence over the KRG. Ankara is not only well-positioned to continue "bartering" operations with Erbil — exchanging trucked, Kurdish hydrocarbons for diesel products — but to further entrench its energy interests by establishing a state-affiliated company that would invest in Kurdish oil fields. This tactical move would allow Ankara to circumvent Baghdad’s blacklist of companies without jeopardizing its state-led (TPAO) hydrocarbons investments in southern Iraq.

Still, beyond creative media reporting and sporadic, inflammatory remarks by Turkish Prime Minister Recep Tayyip Erdogan, Turkey has taken no real steps to promote viable, independent Kurdish exports that would jeopardize Turkish investments in the rest of Iraq. Erdogan may have stated the KRG’s rights to sign its own energy deals within the framework of the Iraqi constitution, but he has affirmed that Turkey’s interests were to increase volumes of the existing pipeline. To ease concerns by Iraqis and international partners, Turkish Minister of Energy Taner Yildiz further indicated that Turkey remains committed to southern Iraq. He also suggested ways that Turkey could develop a joint project with his “Iraqi brethren,” including a third pipeline that would export southern Iraqi crude to Turkey.

Turkey favors Nabucco West as gas export route

By Gulgiz Dadashova | AzerNews

Turkish Energy Minister Taner Yildiz has said that the project on gas transportation from the Caspian region to Europe - Nabucco West - is a more ambitious project than Trans Adriatic Pipeline (TAP).

Nabucco West and TAP are viewed as options to transport gas from the Azerbaijan's biggest gas field and one of the largest in the world - Shah Deniz.

Nabucco West is a short-cut version of the Nabucco project, which envisages construction of a pipeline from the Turkish-Bulgarian border to Austria. The project's shareholders are Bulgarian Energy Holding, Romanian Transgaz, Turkish Botas, Austrian OMV, German RWE and Hungary's FGSZ.

TAP project is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into western Europe. TAP's initial capacity will be 10 billion cubic meters per year, but it is easily expandable to 20 billion cubic meters. TAP's shareholders are AXPO of Switzerland (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).

The minister said that while choosing the final route for gas supplies to Europe, the economic benefits from transportation will be taken into account. "In this sense the Nabucco West project is more ambitious."

However, Taner added, it is the Shah Deniz consortium, who will choose the final route.

Nabucco West and TAP submitted their bids to the Shah Deniz consortium in late March.

Turkey says joint energy projects with Greek Cyprus, Israel possible

by Bülent Keneş | Today's Zaman

Weary of a lingering political tension undermining potential large-scale energy deals in its surrounding region, Turkey sees it possible to cooperate with Greek Cyprus and Israel in joint energy projects in the Mediterranean “so long as the political atmosphere allows it,” Turkish Energy Minister Taner Yıldız told a meeting in Baku on Monday.

The minister was speaking at a meeting with the State Oil Company of Azerbaijan Republic (SOCAR) president on the sidelines of the World Economic Forum Strategic Dialogue on the future of the South Caucasus and Central Asia that kicked off in Baku on Monday.

“In case of a possible remedy to political issues that remain a gridlock hindering further prosperity in our region, Turkey will be ready to take steps in order to ensure a lasting peace environment,” Yıldız said in a rare statement of what can be regarded as "extending an olive branch.”

Underlining that a recent Israeli apology to Ankara over the Mavi Marmara raid should not be seen as an excuse for future energy partnerships with this country, Yıldız told reporters: “But it is possible that a cooperation in energy between Turkey and Israel follow an anticipated rapprochement.” He said Turkey will then “not only warm to partnering in energy deals with Israel but also would like to see Greek Cyprus be involved here.”

But the minister has some reservations as he cites a single condition Turkey has long seen as vital: Greek Cyprus abiding by international law. “If we are able to make sure the energy resources in the eastern Mediterranean are made use of in line with international law, this will be an opportunity for regional peace and stability,” Yıldız said. “If we see the energy plans that are against international law continue, then this is a threat to regional security.”

After Cyprus bailout, Israeli apology, gas takes centre stage

by Alakbar Raufoglu and Andy Dabilis | Southeast European Times

The prospect of normalisation between Israel and Turkey following last month's apology has opened the questions about the relationship between Israel, Greece and Cyprus.

The fallout between Israel and Turkey over the past four years pushed Israel for strategic and economic reasons to cozy up to Greece and Cyprus, Turkey's historic rivals in the Eastern Mediterranean.

"The relations that were built in the last four years with Greece and Cyprus were to a great extent a result of the severe crisis with Turkey," Alon Liel, the former Israeli ambassador to Turkey, told SETimes.

Some analysts say this geopolitical and economic calculation could change following Israeli Prime Minister Benjamin Netanyahu's apology to Turkey for the 2010 raid on the Turkish aid ship, the Mavi Marmara, as it tried to breach an Israeli blockade of Gaza, resulting in the death of nine Turkish activists.

Mavi Marmara led to a severing of relations between once close regional powers. The apology opened the way to a still nascent rapprochement.

The prospect of Turkey and Israel rekindling their once close relationship has many observers looking to the large but disputed gas deposits in the Eastern Mediterranean that could transform the geopolitical future of the region.

Minister: Turkey uses energy resources for regional stabilisation and development

by A. Taghiyeva | Trend


Turkey is using energy resources and power projects for the stabilisation and development of the region, Turkish Minister of Energy and Natural Resources Taner Yildiz said at a meeting of the World Economic Forum (Davos Forum) in Baku today.

Turkey has restructured its energy sector twofold during the past 10 years, he said.

He added that during this period, the country's GDP has increased threefold. This testifies to the successful development of the Turkish economic and energy sectors.

This means because Turkey has achieved so much in the energy sector, today the country can implement different energy and economic projects with many world countries.

 "Along with the implementation of the South Stream project with Russia, Turkey is also successfully implementing the Trans-Anatolian gas pipeline (TANAP) project with fraternal country Azerbaijan," Yildiz said.

 "On the other hand, Turkey continues its energy cooperation with Iran, despite the political problems of the latter," he said. "It is also developing a partnership in the energy sector with neighbouring Iraq."

The minister also stressed such projects as Baku-Tbilisi-Kars and Baku-Tbilisi-Erzurum, which are the key tasks in the transport and energy security of the region.

According to Yildiz, while connecting Asia's production capacity with the European consumer markets, Turkey plays an important role of an energy transport bridge in the region.

Source: http://en.trend.az/capital/business/2136525.html

Turkey-Israel: the new Great Game

by Daniel Dombey | Financial Times

There is a new Great Game afoot and it is taking place beneath the sea floor of the eastern Mediterranean.

Turkey and Israel’s tentative reconciliation is a process so fraught that US Secretary of State John Kerry appeared in Istanbul at the weekend to chivvy the two sides towards restoring full diplomatic ties. But if the steps he set out can be taken — agreeing compensation for nine Turks killed by Israeli forces in 2010, avoiding inflammatory talk, exchange of ambassadors — then a whole series of changes could be unleashed from Damascus to Brussels.

 In particular, there is the question of a pipeline that could ferry newly discovered Israeli natural gas to energy-hungry Turkey — a move that would knit the two US allies closer together, despite enduring suspicions.

“It is possible that cooperation in energy between Turkey and Israel could follow an anticipated rapprochement,” said Taner Yilidz, Turkey’s energy minister, on Monday.

Turkish officials caution that bilateral talks on such cooperation can only really get going after ambassadors are exchanged — but add that business contacts on the topic are already burgeoning.

Ozgur Altug at BGC partners in Istanbul contends that rapprochement means that “relatively weak Israel-Turkey economic relations will pick up again”. He observes that although Turkish exports to Israel have risen over the last decade (falling back slightly in 2012) to their current level of $2.5bn, they have declined as a proportion of Ankara’s total exports (of which they now account for about 1.5 per cent rather than more than 2 per cent previously).

The ‘Great Game’ in the Levant

by Semih Idiz | Al-Monitor

With billions of cubic meters in estimated gas reserves, the Eastern Mediterranean, or the “Levant Basin” by another name, is turning into the stage for a contemporary version of the 19th Century “Great Game,” which has as much potential for catalyzing peace, as it does for contributing to new tensions in a region already rife with conflict.

The key event this respect came on March 30, the historic date when natural gas from the Tamar field, off the coast of Israel, started flowing to the Israeli mainland, thus kicking off a process that will not only make the Jewish state largely energy independent, but also turn it into a key supplier for European markets.

The Tamar field, discovered as recently as 2009, is said to hold 250 billion cubic meters [427 billion square feet] of gas, and is the smaller of Israel’s two offshore fields, the bigger one being the Leviathan field with its estimated 425 billion cubic meters of gas, but which has yet to be developed.

Texas-based Noble Energy and the Israeli Delek Energy, the two largest shareholders in the Israel gas fields are said to be looking for a go-ahead now from the Israel government to export the larger portion of the gas, since demand in Israel is insufficient to cover the cost of developing the Leviathan field.

Turkish Minister: Anatolia only feasible gas route for Israel, Greek Cyprus

Hürriyet Daily News

Turkey awaits normalization with Israel to discuss energy projects, as Israel’s energy plans would only be reasonable if Turkey was involved, Turkish Energy Minister has said

Turkey is not indifferent toward Israel’s energy projects for transferring the Eastern Mediterranean natural gas and oil to the international markets, since the resources would be not be feasible unless they were transferred through Turkey, Turkish Energy Minister Taner Yıldız said.

“It is the same for Greek Cyprus,” Yıldız told reporters yesterday. “It will have no benefit to your people if you say ‘I will do it even if it is expensive.’ I’m telling this both for Israel and Greek Cyprus,” he said, adding that the projects would be meaningful only if the right move is made.

But, discussing energy deals before the restoration of ties between Turkey and Israel has been finalized would be impossible, according to the minister.

“As relations normalize in the future, then we can discuss if natural gas could be transferred by a pipeline through Turkey,” the minister said.

Turkey dismayed at lack of US partnership on second nuclear plant: Minister

Hurriyet Daily News

Turkey expected to form a partnership with the United States to build Turkey’s second planned nuclear plant, Energy Minister Tamer Yıldız told daily Hürriyet in an interview published April 6.

“If I don’t build the nuclear plant with the U.S., which strategic project will I do? Will I sell tomatoes and peppers?” Yıldız said, adding that Turkey had made a proposition to the “highest officials” in Washington about participating in the tender.

“They told us that the project was not feasible. It may not be feasible, but it is strategic. [Making] this strategic contribution falls upon Washington,” he said.

China and a Japanese-French joint venture are competing to build the plant, which will be located in the Black Sea province of Sinop, Yıldız said April 4. The first plant in Akkuyu, in the Mediterranean province of Mersin, will be constructed by Russia’s Rosatom company.

Turkey: Does Ankara Hold the Key to Ending Cyprus Financial Woes?

by Justin Vela | Eurasianet.org

Some 60 trillion cubic feet of gas reserves around the divided island of Cyprus, a find possibly worth hundreds of billions of dollars, could find its way to Turkish and European markets through Turkey. Combining a deal of exporting natural gas from Cyprus with delivering water and electricity to the island may benefit Ankara to mediate a settlement for the divided island. (Photo: Council of Europe)

Turkey’s potential as a regional energy hub could help alleviate the financial turmoil hitting the divided Mediterranean island of Cyprus, analysts say. But before any steps are taken, Ankara would like to see movement toward a resolution of the decades-long conflict between Greek and Turkish Cypriots. And that is a long shot over the short term.

The International Monetary Fund’s 1-billion-euro (over $1.28 billion) contribution to a 10-billion-euro (over $12.8 billion) rescue package, announced on April 3, may ease concerns that the meltdown of Cyprus’ financial system could trigger a major crisis for the euro zone, but Greek Cypriots still have an incentive to seek alternative ways of stimulating their economy, observers note.

Turkey, capitalizing on its growing role as a regional energy hub, has offered options. But its 38-year-long territorial conflict with Cyprus over the self-declared Turkish Republic of Northern Cyprus could prove an insurmountable barrier to a solution. The major area of possible cooperation is over hydrocarbon deposits in the waters off Cyprus. These resources -- estimated to include some 60 trillion cubic feet of gas reserves, a find possibly worth hundreds of billions of dollars -- are deeply contentious. Greek Cypriots have granted exploration licenses to international energy companies without consultation with northern Cyprus.

Turkey privatisations: back on track

by David O'Byrne | Financial Times

Turkey’s ambitious privatisation programme scored another significant success Friday with the successful sale of four more of the country’s regional power distribution companies for a total of $3.46bn.

The sale of the four was completed after more than six hours of open bidding between 16 companies.

The two largest power distributor on the auction block – Toroslar EDAS which distributes in the Adana region and AY EDAS which distributes on the Asian side of Istanbul – were sold for $1.7bn and $1.2bn respectively to Enerjisa, a joint venture between Turkey’s Sabanci Holding and Germany’s E.ON.

The auction win comes just four months after E.ON bought out the 50 per cent stake in Enerjisa previously held by Austrian power group Verbund.

Speaking to reporters, Selahattin Hakman, head of Sabanci’s energy arm, said Enerjisa’s ambitions had broadened since the arrival of E.ON.

Enerjisa already owns Baskent EDAS which distributes power in Ankara and now holds close to the 30 per cent maximum share any individual company can hold in the Turkish power distribution sector.

Of the other two regional distributors that were also on auction, Dicle EDAS which distributes in the Diyarbakir region was sold to the Iskaya-Dogu consortium for $387m and Vangolu EDAS which distributes in the Van region was sold to the Turkerler construction group for $118m.

Birol: Nuclear power key to Turkish energy future

Today's Zaman

Turkey should build “as much nuclear power as possible” to help meet its growing energy needs, International Energy Agency Chief Economist Fatih Birol said in Brussels on Sunday night.

Speaking at the German Marshall Fund's Brussels Forum, the economist qualified his endorsement by saying that nuclear power should only be embraced “with attention given to seismic risks” that could unleash a Fukushima-style accident on Turkish soil.

Birol was unwavering in his endorsement however, saying that Turkey could employ the technology safely and use it to overcome its dependence on foreign fossil fuels. The argument that Germany and Japan are jettisoning the technology also didn't sway the economist, who was quoted as saying: “When we compare Turkey and Germany there are huge differences. In Germany, electricity demand won't even grow 1 percent this year. … But as for Turkey, demand is increasing very rapidly. From this perspective, Turkey must open nuclear power plants.”

His recommendation comes after Ankara's announcement this week that it will begin accepting bids for a newly proposed nuclear plant in the Black Sea province of Sinop. Birol's comments also come amid sustained criticism of Ankara's nuclear plans and a $25 billion nuclear facility planned for the southern province of Mersin, where activists say it faces an unacceptable risk of an earthquake.

European energy security is not up to Europe

      By Alexandros Petersen  | EUobserver

BRUSSELS - It is no secret that Russian dominance of European natural gas markets has splintered the Union.

 

The imperative of having enough heat or cooking fuel in the winter has put countries – especially in central and eastern Europe – in two camps: those who make bilateral deals with Russia’s energy behemoth Gazprom (Western unity be damned), and those who suffer from the disunity and call continually not just for co-ordinated policies to withstand Moscow’s pressure, but also for alternative resources from the Caspian region or elsewhere to diversify supply.

The second camp has it right, but they – as well as Euro-Atlantic institutions – have sabotaged their own efforts by seeking to dictate terms to alternative producers, such as Azerbaijan.

All the while, the pro-Russia camp has made gains.

Earlier in March, Serbia passed a constitutional amendment on land ownership to make it easier for Gazprom to buy up the land it needs for a major pipeline project aimed at increasing southeastern Europe’s dependence on Russian resources and defeating regional plans for diversification. This follows Germany’s joint development with Russia of the Nord Stream pipeline, which connects German consumers directly to Russian fields across the Baltic Sea. It bypasses and undermines the energy security of fellow Nato and European Union members, Poland and the Baltic states.

The problem with these policies is that in making a bilateral deal with Gazprom on natural gas supply, individual European countries are in fact coming in line with Kremlin policy which seeks to divide and conquer the continent.

 

Turkish energy: not enough storage

by David O'Byrne | Financial Times


There is an oft-repeated mantra used to help explain Turkey’s perennially problematic current account deficit: “A $10 rise in the oil price adds $4bn to the current account deficit and half a percentage point to the inflation rate”.

It’s a simplification but it does neatly sum up Turkey’s position as a country with few energy reserves of its own. What it doesn’t tell you is the extent of Turkey’s dependence on imported gas and, given the country’s economic growth, how it is starting to look irreversible. Now the question is whether Turkey can get enough gas at the right time to avoid shortages.

Indeed, as successive speakers at the Gas to Power 2013 conference in Istanbul this week pointed out, the main challenge facing Turky’s energy sector is not how to reduce dependence on gas but rather how to get more of the stuff.

Despite official pledges to reduce the country’s gas burn, efforts to diversify have been slow-moving. Around 40 per cent of Turkey’s power is generated by burning imported gas.

There is an official target of 20GW of wind power capacity by 2023 – but few believe that anything more than a faction of the target is attainable. Incentives to encourage development of low-grade domestic lignite coal are only now being introduced.

More worryingly, new gas-fired facilities are still being developed, with around 9GW already licensed and expected to be commissioned by 2018, for which new gas supplies will have to be found.

Gas in Cyprus – how much of a guarantee ?

by Nick Butler | Financial Times

The controversial bailout deal for Cyprus proposed by eurozone finance ministers has led President Nicos Anastasiades to promise investors who stay in the country after the compulsory forfeit of 9.9 per cent of their deposits that they will share in the country’s future wealth from natural gas.

In return for the forfeit they will be given shares in the banks and what are described in press reports as ” equity returns, guaranteed by future natural gas revenues”.

Whatever equity returns means, nothing can be guaranteed by future gas revenues at this stage. The facts are simple. Only one well has been drilled offshore Cyprus. The field identified – in Block 12 to the South East of the island – is said to contain perhaps 7 tcf of gas. But with only one well there can be no hard estimate. It could be more, but it could just as easily be less. Nor does anyone yet know what the cost of extraction will be.

The head of Cyprus’ State Hydrocarbons Company – Charles Ellinas – said last week that Cyprus could have up to 40 tcf of gas within its exclusive economic zone. He talked about Cyprus exporting gas to Europe via an LNG terminal by 2019.

Yes, and pigs might fly over Nicosia. No one will build an LNG terminal until someone drills more wells to confirm the existing find and several more successful wells on other blocks. The licensing round has barely begun, and interestingly Noble Energy, who drilled the first successful well, are not bidding for more acreage. That is a very odd decision if the company shares Mr Ellinas’ view that the area holds 40 tcf.

Turkish government committed to liberalize gas market; energy minister

Gas to Power Journal

The gas market is not yet fully liberalized and things still needs time, but as the government we are committed to duplicating the efforts made when we liberalized the power market, Turkey's deputy minister for energy and natural resources, Hasan Murat Mercan, told a conference in Istanbul organized by Gas to Power Journal.

With the electricity draft legislation being debated in parliament, the gas legislation will need to follow suit swiftly. "Parliament needs [to] get a draft legislation finalised," he said but called for patience and pointed out that proceedings had also taken a couple of month time to revise the oil legislation.

"The problem for natural gas lies within power generation. Our policy is to rely on local resources –solar, lignite –and there are incentives for investors," he stressed. In contrast, gas-fired power generation projects acquired or launched after June 2012 will no longer enjoy incentives.

Turkey aims to increase natural gas imports to cater for the country's rising gas and power demand. However, it has proven difficult to substantially increase gas supplies from Azerbaijan – let alone from Turkmenistan or the Kurdish region of northern Iraq.

Turkey aims to privatize all thermal power plants by 2015

Gas to Power Journal

Keen to fast-track the liberalisation process of the Turkish energy market, the government has set a timeline for divestment of state-owned power generation assets.

 "We hope to finish the privatization of Turkey's thermal power plants by 2015," Atif Kir, Head of Project Group, at the Turkish Ministry of Privatization Administration (OIB) told Gas to Power Journal in an interview.

To complete divestment of state-owned power plants, a total of 12,000 MW of state-owned coal- and gas-fired power plant capacity is up for auction.

"Private capital currently owns about 55 percent of power generation assets and our aims to get at least 85 percent of capacity to be run by private businesses in the near future," he said, implying that the remainder might be classified as 'strategic assets' which may remain in the hands of the state.

Turkey incentivises use of domestic lignite to ease gas import dependency

Gas to Power Journal

The hunger of Turkey's industry for natural gas is unabated, while new government incentives and tax breaks aim to put the use of domestic lignite resources at an advantage over natural gas as a fuel source for power generation.

 "We are over reliant on gas imports and this dependency is set to rise in line with GDP growth," said Levent Özcan Caner, Strategy Department, Ministry of Energy and Natural Resources, suggesting that government regulation in favour of coal would help reduce Turkey's gas import dependency.

 As project developers start to submit more licences for lignite-fired plants, "we are also putting a strategy document together for licence applications for power plants that run on imported coal," he told a conference organised by Gas to Power Journal in Istanbul.

 To incentivise investment in new coal power plants, the Turkish government has granted developers of new lignite power plant projects some form of corporate income tax allowance (investment participation rate), exemptions from customs duty and VAT and support employer's contribution to insurance premiums. Moreover, the government also helps with allocating state-owned land near domestic lignite production sites.

Analysts estimate the above measures will increase the share of coal in Turkey's energy mix rise from about 28 percent in 2011 to over 37 percent by 2020. To reap maximum benefits, developers of coal-fired power plants need obtain investment certificates by 2013, Gas to Power Journal was told.

Turkey responds to Greece's note verbale to UN by issuing its own

Ekathimerini

Turkey has forwarded a note verbale to the United Nations in response to a Greek one sent to the international organization on February 20, the Greek Foreign Ministry announced late on Tuesday.

According to the Greek Foreign Ministry, the Turkish verbal note challenges the right of the Greek islands to a continental shelf and exclusive economic zone, in violation of article 121 of the Convention on the Law of the Sea.

Athens had submitted a verbal note to the UN notifying international officials of Turkey’s granting of exploration permits for areas deemed to cover the Greek continental shelf.

At the time Turkey’s Foreign Ministry had issued a statement defending its decision, noting that the permits that had been issued since 2007 to the state-owned oil company TRAO concerned territories within boundaries of the Turkish continental shelf in the Eastern Mediterranean.

Will Turkey Benefit from its Centrality?

by Karen Ayat | Natural Gas Europe

Turkey is energy poor. The country imports the vast majority of its oil, gas and hard coal supplies to meet domestic demand. Turkey imports 58 percent of its gas from Russia, 19 percent from Iran, 9 percent from Algeria, 9 percent from Azerbaijan and 3 percent from Nigeria.

Turkey paid $60.1 billion for energy last year with an 11 percent increase from a year earlier. Turkey’s energy dependency is expected to double in the next decade due to a massive rise of energy consumption, according to a recent report by the US Energy Information Administration(EIA). Electricity needs in particular are expected to grow twice as fast as its overall energy use.

In a recent announcement, Energy Minister Taner Yıldız said that indications of possible shale gas resources had been found in the Central Anatolian provinces of Ankara, Konya and Kırşehir. The shale gas reserve is estimated at 1.8 trillion cubic meters and could satisfy 40 years of natural gas consumption with an annual production of 45 billion cubic meters. Turkey is currently employing its efforts to determine the accuracy of its shale gas potential.

Whether Turkey is blessed with shale gas remains uncertain. What is certain, is that it is blessed with centrality. It connects an energy-rich East to an energy-hungry West. Turkey could therefore play a paramount role in facilitating the transport of Israeli gas to a Europe largely dominated by Russian gas. Israel and Turkey are flirting with the idea of building a gas pipeline from Israel’s Leviathan Basin directly to Turkey to supply European markets. However, a few obstacles might stand in the way.

No Turco-Greek oil rift in Aegean: Energy minister

by Barçın Yinanç | Hurriyet Daily News

Energy Minister Yıldız seeks to put Turkey’s Aegean neighbor at ease, saying Ankara has no plans for energy exploration that would upset Greece

Energy issues will not become a subject of tension between Turkey and Greece, Turkish Energy Minister Taner Yıldız has said, adding that Ankara has told Athens it has no current intention of conducting exploration in the countries’ shared sea. 

“There is no problem in energy issues,” he told the Hürriyet Daily News despite a divergence of views on exploration rights in the eastern Mediterranean that recently droveGreece to complain to the United Nations about Turkey’s exploration efforts.

“We have the intention of using energy issues not as a reason to create tension but as a reason for growth and opening. We will see whether other countries will follow this principle,” Yıldız told the Daily News when asked about the recent initiative of Greece, which said on Feb. 22 that it had notified the U.N. of Turkey’s granting of exploration permits for areas “on the Greek continental shelf.”

Greece’s move came just days ahead of Greek Prime Minister Antonis Samaras’ visit to Turkey, which resulted in the signing of nearly two dozen agreements on March 4.

Turkey is willing to exist on whole Iraqi soil: Energy Minister

by Barçın Yinanç | Hurriyet Daily News

Turkish Energy Minister Taner Yıldız says the Kurdistan Regional Government (KRG) of northern Iraq should be more open for energy deals, linking the issue to the continued ‘normalization’ of Iraq. ‘Why is there a differentiation between the south and the north when the issue is to increase revenues?’ he asked the Daily News.

Controversial energy projects between Turkey and the Kurdistan Regional Government (KRG) are necessary for the continued “normalization” of Iraq, according to Turkish Energy Minister Taner Yıldız.

“If Iraq is to be considered as a whole … there should not be any differentiation between its south, north, east, or west,” Yıldız said in an interview with the Hürriyet Daily News. “The revenue to be obtained there [in the north] will be reflected based on the proportionality that they agreed on, which is 17 to 83 percent. Why is there a concern about this?”

The Iraqi government claimed to have received a letter from Ankara giving assurances that it would not sign any energy deals with the Kurdistan Regional Government (KRG) without the consent of Baghdad. 

We have no information about that letter. No such letter was written by the Turkish Energy Ministry. However, if Iraq is to be normalized and if we are to talk about Iraqi projects, then we need to agree on doing projects. In other words, saying “we agreed not to do any projects” can’t be a contribution to Iraq’s normalization. If Iraq is to be considered as a whole, which it should be, there should not be any differentiation between its south, north, east, or west. If you make a distinction about a certain place then it means there is a problem there. Why is it that oil or natural gas exploration becomes an issue when no such issue was raised when we undertook operations in the south? The revenue to be obtained there [in the north] will be reflected based on the proportionality that they agreed on, which is 17 to 83 percent. Why is there a concern about this?

Baghdad says: I have a problem that I need to solve with the north, don’t strike a deal with the north before I solve the problem.