Iraqi gas vital for Ankara, expert says

Baku, Azerbaijan, Jan. 8

By Rufiz Hafizoglu - Trend:

Gas that will be supplied to Turkey from Kurdistan Regional Government (KRG) in northern Iraq is vital for Ankara, researcher of the Turkish Foundation for Political, Economic and Social Research (SETA) Salihe Kaya told Trend Jan. 7.

Against the background to diversify natural gas supplies, KRG in northern Iraq can be an important source of supply for Ankara, according to Kaya.

For Ankara, natural gas from the KRG in northern Iraq will cost much cheaper than gas from other sources, Kaya said.

It was reported earlier that the tender for constructing a new gas pipeline between Turkey and the Kurdistan Regional Government (KRG) in Northern Iraq will be held Feb.9, 2016 in Ankara.

Both local and foreign companies can participate in the tender. The winner will build the new gas pipeline for 720 days. The length of the pipeline will be 181.5 kilometers.

The volume of the natural gas reserve on the territory of KRG is 5 trillion cubic meters, according to Iraqi media.

KRG and Ankara signed a contract for 50 years in 2013, to supply natural gas to Turkey.

It is expected that after completing the construction of the new gas pipeline, the Kurdistan Regional Government in Northern Iraq will deliver 10 billion cubic meters of gas to Turkey. The volume of gas supplied from Iraq to Turkey will reach 20 billion cubic meters by 2020.

Turkey imports 6.6 billion cubic meters of gas per year from Azerbaijan on the basis of a 'take or pay' contract. Turkey also buys 9.6 billion cubic meters of gas from Iran on the basis of the contract that is valid till July 2026.

Ankara also has agreements with Algeria (from 1988 to October 2024) and Nigeria (from 1995 to October 2021) for supplying 4.4 billion cubic meters and 1.3 billion cubic meters of liquefied gas per year, respectively.

There are two contracts between the Russian company and Turkey's Petroleum Pipeline Corporation (BOTAS), according to Gazprom. These contracts envisage supplying up to 8 billion cubic meters and around 12 billion cubic meters of gas via the Trans-Balkan route and Blue Stream, respectively.

The first contract is valid till 2022 inclusive, while the second contract will remain in force at least till 2028. Moreover, private traders buy up to 4 billion cubic meters of Russian gas via the Blue Stream. These agreements were signed for a period of 20 years. A number of traders have signed long-term contracts with Gazprom Export on importing a total of 6 billion cubic meters of gas till 2042 to substitute the very first contract for supplying Russian gas to Turkey which expired in 2012.

The traditional volumes of gas subject to the "take or pay" rule account for 80 percent of the contracted volumes. Thus, Turkey is obliged to buy 24 billion cubic meters of Russian gas by 2022 and 17.6 billion cubic meters by 2028.

Nevertheless, Russia undertakes to supply 20 billion cubic meters of gas to Turkey per year, according to BOTAS. The first contract for exporting 16 billion cubic meters of Russian gas to the country was signed in 1997 and expires in late 2025. The second contract for delivering 4 billion cubic meters of gas was signed in 1998 and will remain in force till 2022.

Turkey was the second largest importer of Russian gas after Germany in 2014: Ankara purchased 27.3 billion cubic meters of gas from Russia's Gazprom company.

Turkey has been importing 25-27 billion cubic meters of gas from Russia in recent four years. It accounts for 55-58 percent of the country's gas consumption.

The total volume of gas consumption in Turkey is 48 billion cubic meters.


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

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