BAKU/ANKARA Turkey’s leaders have mounted a charm offensive among regional energy producers in an effort to diversify supplies as relations with key all-natural gas provider Russia crumble following the downing of a Russian warplane by the Turkish airforce.
President Tayyip Erdogan and Prime Minister Ahmet Davutoglu have traveled to important power partners Qatar and Azerbaijan respectively this week in an work to avert any economically damaging disruption in energy supplies as winter sets in.
Moscow and Ankara have noticed relations hit a new low considering that a Turkish air force jet shot down a Russian warplane close to the Syrian-Turkish border last week, the most significant incident between Russia and a NATO member state in half a century.
Russian President Vladimir Putin described the move as a war crime on Thursday and mentioned the Kremlin would punish Ankara with added sanctions. Russia has currently banned some Turkish meals imports and left trucks carrying Turkish exports stranded at its borders.
But Russia could deal a real blow by lowering gas supplies, a move broadly observed by analysts and Turkish officials as unlikely for now but which could seriously hurt the Turkish economy and for which Ankara is drawing up contingency plans.
“There is certainly a crisis proper now … We are exploring how we can offset this,” a Turkish power official stated.
“Davutoglu and Erdogan have personally taken the initiative to make confident Turkey doesn’t experience a problem in terms of power supplies.”
Ankara buys almost 60 % of its total gas requirements — around 27 billion cubic meters (bcm) — from Russia via two major pipelines, which enter Turkey through the Marmara area, the country’s industrial hub which involves Istanbul, its most significant city, and the most sensitive location to any disruption in provide.
“The Marmara region buys virtually all of its gas from Russia and this area tends to make up 40 % of Turkey’s GDP (gross domestic item) as nicely as its power consumption,” said Details International Power consultant Cuneyt Kazokoglu.
“If Russia cuts gas, it would properly be shutting down the Marmara region and that would seriously hurt Turkey,” he mentioned, adding he did not anticipate Moscow to take such a step as it would break a “contractual obligation”.
NOT Adequate LNG CAPACITY
Buying gas from Turkmenistan and boosting supplies from Iran, already Turkey’s second biggest supplier, are among the choices becoming considered, power officials stated. Bringing supplies from northern Iraq is an additional possibility.
Davutoglu visited Azerbaijan on Thursday with the aim of rising gas imports by means of the Trans-Anatolian Pipeline (TANAP), a essential project due to bring 16 billion cubic meters of gas to Europe. Around 6 bcm of that is destined for Turkey.
Speaking in Baku, Davutoglu mentioned Turkey and Azerbaijan had agreed to full the project ahead of the original target date of mid-2018.
Earlier this week Erdogan visited Qatar to discover the possibility of acquiring a lot more liquefied all-natural gas (LNG) cargoes from its Gulf Arab ally.
But Turkey’s insufficient storage capacity and the heavy dependence of its organization on typical organic gas mean any boost in LNG imports would only partially make up for lost Russian gas, according to Turkish think-tank TEPAV.
“The most important element of establishing supply safety in nations which have a high dependence on all-natural gas imports is to have a storage capacity equivalent to 20 to 30 % of consumption. In Turkey, that is 6 percent,” TEPAV researcher Aysegul Aytac wrote in a recent note.
Almost half of Turkey’s power generation is sourced from organic gas, leaving households and industry vulnerable to any disruption, she mentioned.
“The insufficiency of making use of alternative merchandise in each sector and power generation as well as the inflexibility of households to use anything other than gas imply difficulties could be inevitable in the medium term.”
(Editing by Nick Tattersall and Gareth Jones)