Turkey reassured the public on Wednesday that it is in a good position with regard to energy supplies, saying it is in negotiations for additional resources to meet the demand for gas that will rise in winter.
Energy and Natural Resources Minister Fatih Donmez said the country is in a strong position with the support of long-term natural gas contracts and adequate energy technical infrastructure.
His comments come at a time when European countries are struggling with the energy crisis, specifically the record electricity and gas prices, which have reduced industrial production and increased heating bills for consumers.
Turkey is preparing for record demand for natural gas this year, prompting it to step up efforts to renew long-term contracts that expire this winter.
Addressing the EIF World Energy Congress and Exhibition, Donmez said: “We have resources that feed the system, such as international pipelines, underground natural gas storage, liquefied natural gas (LNG), and floating storage and gas-to-gas regasification facilities (FSRU).
“We are making the necessary preparations for storage. We are negotiating for additional resources to meet the demand for gas that will increase in winter.
Turkey, one of Europe’s largest gas importers, relies on pipeline gas from Russia, Azerbaijan and Iran as well as LNG imports from Nigeria, Algeria and spot markets.
It had four long-term import contracts expiring this year, totaling 16 billion cubic meters annually.
Two industry sources told Reuters on Tuesday that the company had renewed one with Azerbaijan, which agreed to a three-year contract to import up to 6 billion cubic meters annually after the expiry of a 15-year contract, for 6.6 billion cubic meters.
That still leaves Ankara with three contracts to be carried over – two for pipeline state and private sector imports from Russia’s Gazprom of 4 billion cubic meters each, which expire at the end of the year, and 1.3 billion cubic meters of Nigerian LNG expiring. This month.
With time running out, a meeting between the Russian and Turkish presidents ended without a gas agreement two weeks ago.
President Vladimir Putin has tried to reassure Ankara, saying it is shielded from the gas crisis in Europe due to Russian pipeline supplies to Turkey.
This year’s drought has slashed hydropower, restarting idle gas power plants, which is expected to push Turkey’s gas consumption to a record 60 billion cubic meters.
It represents a significant rise from 45 billion cubic meters to 50 billion cubic meters that the state consumes each year and pays for between $12 billion (TL 108.02 billion) and $15 billion.
Turkey imported 48.1 billion cubic meters of gas last year, up 6% from the previous year, a third of which came from Russia.
Efforts to protect families
With an expected increase in gas demand of about 20% this year, Donmes said the ministry is constantly updating plans in line with approaching winter conditions to meet additional demand from various supply channels.
Turkey will have to renew all expired contracts at at least the same volumes to meet demand, and may have to increase its supply of expensive LNG.
Due to its annual consumption, it may have to import approximately 13 billion cubic meters of LNG from the spot markets which are now experiencing a sharp rise in prices. Official data show that spot LNG imports so far this year amounted to 2 billion cubic meters.
At a time when energy prices have rocked global economies, Donmez stressed that “we are doing everything we can to reduce cost increases for our citizens.”
President Recep Tayyip Erdoğan also pledged that the government is stepping up efforts to ensure that global energy implications are only minimally impacted on households and their energy bills.
In addition, Donmez highlighted the upcoming exploration of hydrocarbons in the Black Sea by the country’s Yavuz drillship, which will start drilling after reassembling the Filios drilling rig on the Black Sea coast.
He said that the works are proceeding according to the set schedule, adding that “our goal is to connect the gas to the system in 2023 to complete the first phase of the gas flow.”
Turkey plans to cover up to a quarter of its consumption from its discovery of the Black Sea by 2027, which is expected to enhance its influence in the negotiations.