Agenda

Turkstream And Natural Gas: Türkiye’s Energy Potential

Türkiye has achieved solid economic momentum in the last 20 years. Even though this acceleration has slowed down as a result of certain external factors such as the pandemic, it has always been above the world average. This economic growth has linearly been reflected in the energy production and consumption of Türkiye.

At the beginning of the 2000s, over half of the electricity production in Türkiye was obtained from natural gas cycle power plants. In contrast, almost all of the natural gas con- sumed was imported.

Turkish Energy Management took two important de- cisions back then:

  1. Becoming able to produce energy resources equally from five main sources. (Coal, water, natural gas, nuclear, and renewable resources)
  2. Finding and extracting our own natural gas and oil and becoming a hub country in natural gas.

In twenty years, the share of renewable resources in the installed power has exceeded 50%, the construction of the nuclear power plant has started and the first power plant will be commissioned in 2023. In terms of natural gas, many international pipelines were built and our first major natural gas discovery was made in the Black Sea, which is under construction and will be commissioned in 2023.

Türkiye’s electricity consumption increased by 8.74% YoY in 2021, reaching 332.9 billion kWh, and electricity generation increased by 9.14% YoY, reaching 334.7 billion kWh. Accord- ing to projections, electricity consumption is expected to reach 370 billion kWh in 2025 and 591 billion kWh in 2040.

At the end of October 2022, the installed capacity of our country reached 103,276 MW. At the end of October 2022, our installed capacity by resource breaks down as follows: 30.6% hydraulic energy, 24.5% natural gas, 21.1% coal, 10.9% wind, 8.8% solar, 1.6% geothermal, and 2.5% other resources.

NATURAL GAS IN TÜRKİYE

It is predicted that approximately 60 billion m3 of natural gas will be consumed in 2023 in Türkiye. Projected to reach the plateau level in 4-5 years, the gas to be extracted from the Sakarya basin will bring 20 billion m3 of gas annually. With the purpose of meeting the increasing oil and natural gas needs from domestic sources as much as possible, 2 seismic survey and 4 drill ships were procured. A significant

amount of natural gas reserves were detected in many points in the Black Sea, and promising results also began to appear in many points in the Mediterranean.

Pipelines such as Blue Stream, TANAP, and TurkStream were built to ensure Türkiye’s security of supply and make it a hub. Blue Stream has a capacity of 16 billion m3, TANAP will have a capacity of 31 billion m3 upon the commission- ing of the last phase, and TurkStream has a capacity of 31.5 billion m3.

TurkStream is a natural gas pipeline that starts from Russia, crosses the Black Sea, enters Türkiye’s Marmara region and connects to Bulgaria through there, thus providing energy to all of Europe, especially Southern Europe.

Being the second direct gas line between Russia and Türkiye, TurkStream was covenanted between the energy giants of the two countries, Gazprom and BOTAŞ with a val- ue of EUR 11.4 billion. The sea section of the line consists of two 930 km long pipes running parallel to each other

in the Black Sea. 700 km of this line exists within Turkish territorial waters.

Going down to a depth of 2,200 meters in places, the pipes start near the city of Anapa on the Russian coast and reach the Turkish coast in the town of Kıyıköy in Thrace. After Kıyıköy, one of the two underground pipelines on land con- nects to Türkiye’s existing natural gas network in Lüleburgaz, and the other pipeline reaches the European border. In terms of the negotiations between Türkiye and Russia, the negotiations regarding the sales to third countries through Türkiye are still ongoing.

BLACK SEA NATURAL GAS

Türkiye will start using the natural gas extracted from the reserves in the Black Sea in the first half of 2023. 540 billion m3 of natural gas in the Sakarya Gas Field will be enough to meet the needs of households in Türkiye for 30 years.

One of the country’s three drillships, Fatih had discovered 540 billion cubic meters of natural gas reserves in the Sa- karya Gas Field. Afterwards, as a result of further discoveries, this amount increased even more.

Seismic survey and drilling works are ongoing in the Black Sea and the Mediterranean, and the hydrocarbon exploration

and current production activities in terrestrial areas are accelerated, and 150 wells are planned to be drilled by the Turkish Petroleum Corporation in 2022.

Sakarya Gas Field will go down in history as the world’s fastest offshore field development project from the phase of exploration to the first production. In consideration of the prediction that the process will be completed in ap- proximately 2.5 years from the discovery of natural gas to its production, there is no other country in the world that can do this in such a short time.

Taking into account the natural gas production of Türkiye in 2021, our natural gas production will increase approximately 10 times depending on the expected daily production of 10 million cubic meters in the first phase, and approximately 40 times depending on the expected daily production of 40 million cubic meters in the second phase. As a result of the operations to be performed, as a result of the upgrade of the existing reserves, our country will become a critical source country that will sell a certain part of the natural gas it produces through the hub it will establish, as it meets its own natural gas needs.

NATURAL GAS HUB

In order for a physical hub to be formed, it is necessary for gas to compete with gas, for enough gas to come from more than one source to respond to the demand, and for more than one serious and large buyer to be on the demand side as a buyer, and to have physical storage capacities.

The capacities of pipelines and LNG terminals coming to Türkiye will have reached 130 billion m3 by 2023. Adding the 20 billion m3 capacity of the Black Sea gas at the plateau level to this, we will have reached 150 billion m3, which is approximately 2.5 times the natural gas consumption of Türkiye. Our storage capacities will also reach 10 billion m3 in 2 years.

The most critical source for Europe seeking an alternative to Russian gas will be the Turkish Natural Gas Hub.

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