Iraq’s gas to Europe through TANAP

Oil&Gas Materials 14 May 2015 22:00 (UTC +04:00)
The project of the Trans-Anatolian Natural Gas Pipeline (TANAP) today is the only alternative to ensure Europe’s energy security
Iraq’s gas to Europe through TANAP

Baku, Azerbaijan, May 14

By Rufiz Hafizoglu - Trend:

The project of the Trans-Anatolian Natural Gas Pipeline (TANAP) today is the only alternative to ensure Europe's energy security.

The project on construction of this gas pipeline is being implemented ahead of schedule by almost three months, and therefore there is reason to believe that it will be completed early. The project is expected to start in 2018.

The TANAP project's importance isn't limited to the fact that it will give a momentum to the development of Azerbaijan, Georgia and Turkey. It is also possible that some other countries will join the project.

In particular, earlier the Turkish authorities stated that Ankara would like to see Turkmenistan as a participant in the TANAP project.

But the project is facing the opposition from such major players in the region as Russia and Iran.

There is only one link needed for the delivery of Turkmenistan's gas to Europe and that is the Trans-Caspian Gas Pipeline.

Along with Azerbaijan, Turkey is a country, the foreign and energy policies of which coincide.

Ankara has repeatedly stated that Turkey intends to become an energy hub in the region. And Turkey, as a country dependent on energy, must rely on the energy resources of the neighboring states.

In this regard, of course, northern Iraq is a key player, as evidenced by the words of Turkey's Energy and Natural Resources Minister Taner Yildiz.

He has repeatedly noted that Ankara's policy in the energy area won't let the energy resources in the region, in particular in northern Iraq, to stand idle.

Ankara and Arbil have a contract for the supply of gas. Under the agreement, it is expected that northern Iraq will begin exporting gas to Turkey in 2016. Under the contract, the initial volumes of the gas supplies to Turkey will stand at about 20 billion cubic meters a year.

While Turkey pays $425 per 1,000 cubic meters of Russian gas, the gas from northern Iraq will cost Turkey half of that in accordance with the agreement. This is a decisive factor for Ankara in reducing what it spends on the import of Russian gas.

It is not ruled out that once the gas supply from northern Iraq starts, Turkey will at least halve the import of Russian gas. All the more so, Ankara has already abandoned the "take or pay" principle in the gas supply from Russia. However, there is no point to expect Turkey to completely refuse the supply of Russian gas.

This suggests that Turkey will purchase 10 billion cubic meters of gas from northern Iraq for domestic consumption, while the remaining 10 billion cubic meters will supply the European market.

Nevertheless, a gas pipeline is needed to supply gas from Iraq to Turkey and further to the European markets. Earlier, Turkish Minister of Energy and Natural Resources Taner Yildiz said that Erbil and Ankara would jointly construct a gas pipeline for gas supply from northern Iraq.

Moreover, Minister of Natural Resources of Kurdistan Regional Government in northern Iraq, Ashti Hawrami said in one of his recent statements that a Turkish company would be created with participation of the private sector and foreign investors to carry out work at the fields in KRG.

It is not ruled out that as the sides stated before, they will start the construction of a gas pipeline for supply of gas from northern Iraq. But they can't fulfill this without Azerbaijan's TANAP project.

Thus, after Turkey's domestic market is provided with 10 billion cubic meters of Iraqi gas, it will be possible to transport the remaining 10 billion cubic meters of gas via TANAP.

To this end, Turkey will have to construct a gas pipeline from the Iraqi border to one of its two provinces - Erzurum or Erzincan where this gas pipeline can be linked with TANAP. All the more so, the pumping capacity of TANAP will reach 31 billion cubic meters.

As can be seen, the potential of Azerbaijan's TANAP project will continue growing.

Edited by CN


Rufiz Hafizoglu is the head of Trend Agency's Arabic news service, follow him on Twitter: @rhafizoglu