Baku, Azerbaijan, Oct. 6 /Trend/
Azer Ahmedbeyli, expert of Trend analytical center
The deadline for submitting final proposals to the Azerbaijani side on the transportation of natural gas within the second phase of the Shah Deniz gas-condensate field development by the shareholders of the pipeline projects Nabucco, TAP and ITGI will expire on Oct. 1. According to SOCAR, all three projects have submitted their transportation options, including rate plans, terms and conditions of construction.
On the same day, Turkish Energy Minister Taner Yildiz said that the agreement on deliveries of Russian natural gas to Turkey via the so-called "western route" (through Ukraine, Romania and Bulgaria), which was signed 25 years ago and expires in December, will not be extended.
Is there any connection between these events, why did Ankara take such a decision? Some people even rushed to call it scandalous.
Judging by the Turkish foreign policy, in the sense that this is not a country that somehow it is possible to force to take any decision, this particular decision of Ankara is not a political, but a purely economic, pragmatic decision. Although it can be assumed that Turkey has decided to now focus increasingly on Caspian gas - from Azerbaijan and Turkmenistan.
It seems that the Turkish decision is simply an additional action for Europe to speed up the implementation of the Southern Gas Corridor, and more specifically, the Nabucco gas pipeline. This is a signal that the demand for Caspian gas does not only exist, but also is increasing. In this way, Turkey is lobbying the Nabucco project, doing this for several reasons. It needs to remember that the Turkish Botas State Pipeline Company is a shareholder of Nabucco - most ambitious of the three projects of Southern Corridor.
Furthermore, if the corridor is working, in the perspective (considering also the supply from Iraq), the volumes will accumulate in Turkey, making it an important transit country - supplier of natural gas to European markets.
Another version that has the right to life is Ankara's intention to simply reduce the price of gas. However, it would be somewhat naive to expect from Gazprom almost 20-percent discount on rising prices.
According to the adviser of Turkish Prime Minister on Eurasia Geybulla Ramazanoglu, Turkey's refusal to renew the agreement on deliveries of Russian gas through the "western route" will not affect the country's economy and energy sector to suffer. According to him, the agreement on Russian gas supplies was signed 25 years ago, when Turkey had no alternative. Now, however, Turkey does not need the volumes of gas received through the "Western Route". "Turkey has an annual compensation for unused gas. In such circumstances, the purchase of Russian gas, but still at an increased price was disadvantageous for the Turkish side," - advisor to the Prime Minister.
Turkey's refusal to prolong the agreement on deliveries of Russian gas through the "western route" will not affect the country's economy and energy sector will not suffer from it, Turkish Prime Minister's advisor on Eurasia Geybulla Ramazanoglu said. According to Ramazanoglu, the agreement on Russian gas supplies was signed 25 years ago, when Turkey had no alternatives. Now, however, Turkey does not need the volumes of gas received through the "western route", said Ramazanoglu. "Turkey had annual compensation for unused gas. In such circumstances, the purchase of Russian gas, but still at an increased price, was disadvantageous for the Turkish side," Ramazanoglu said.
According to the BP Statistical Review of World Energy, in 2010, Turkey imported through pipelines from Azerbaijan 4.35 billion cubic meters of gas, Russia - 16.64 billion cubic meters, and Iran - 7.77 billion cubic meters. In addition, Trinidad and Tobago supplied to Turkey 0.26 billion cubic meters of liquefied natural gas (LNG), Belgium - 0.08 billion cubic meters, Norway - 0.26 billion, Algeria - 3.87 billion, Egypt - 0.27 billion, Nigeria - 1.26 billion and Qatar - 1.92 billion cubic meters of LNG.
The total gas imports by Turkey in 2010 amounted to 36.68 billion cubic meters at the demand of 39 billion cubic meters. Last year, gas consumption in the domestic market in Turkey has grown by 9.2 percent compared to 2009.