By Murat Temizer
ISTANBUL (AA) - Turkey will leverage opportunities to become a natural gas trading hub, rather than a transit hub, said Hakan Irgit, president of Accenture Energy Group in Turkey at the World Energy Congress in Istanbul.
Irgit told Anadolu Agency at the congress, of which Anadolu Agency is the global communication partner for 2016, that Accenture started the second phase of establishing Turkey's natural gas trading platform.
"We completed the first part of the platform project last year. This year, we received approval from the Turkey's Energy and Natural Resources Ministry for the second phase," he said and added, "according to the research we conducted, becoming a transit country is not to the benefit of Turkey."
He suggested that instead of aiming to become a gas transit hub, Turkey should develop sufficient physical entry/exit capacity to ensure diversification of supplies and liquidity to become a natural gas trading hub.
He also recommended that the structure of BOTAS pipeline corporation, Turkey's state-owned crude oil and natural gas pipelines and trading company, be strengthened as a competitive market player and a strong transmission system operator.
Irgit hailed Accenture's research experience that has been put to use in other countries which has sought to develop as a hub.
Energy Researcher from the Foundation for Political, Economic and Social Research (SETA), Erdal Tanas Karagol, also agreed that Turkey should advance to become a trading hub arguing that it is more rational than a transit hub.
"We should focus on being a trading hub. Turkey has many sources around it - Russian gas, natural gas from Azerbaijan, Israel, Iran and Turkmenistan which could flow through Turkey," he asserted
To achieve this, Karagol said Turkey should develop its infrastructure and natural gas storage facilities.
"With these steps, we can become a gas trade hub. Many gas export companies can operate in Turkey, and with the liberalization of the market, the price of gas can be set in Turkey," he said.
Russia supplies around 55 percent of Turkey’s domestic gas consumption. Iran supplies approximately 16 percent and Azerbaijan supplies around 13 percent. These three countries are the major suppliers of Turkey’s natural gas imports, with the remainder supplied through LNG imports from Algeria, Nigeria and Qatar.
Turkey is located close to more than 75 percent of the world’s proven hydrocarbon reserves, which presents Turkey with a unique opportunity to become a major energy transit country between the East-West and the South-North axes.
There are various gas projects in a development stage around Turkey, some of which will become operational in the short term.
Russia and Turkey signed an intergovernmental agreement on Oct. 10 for the implementation of the Turkish Stream natural gas project.
The agreement involves the construction of two lines of gas pipelines through the Black Sea each with a capacity of 15.75 billion cubic meters.
One line is planned to supply gas directly to the Turkish market, while the other line aims to supply gas to Europe through Turkey.
The finalization of the Southern Gas Corridor is also critical for the EU and Turkey as a hub.
The Southern Gas Corridor is one of the most complex gas value chains ever developed in the world. Stretching over 3,500 kilometers, crossing seven countries and involving more than a dozen major energy companies, it consists of several separate energy projects representing a total investment of approximately $45 billion.
The project includes the South Caucasus Pipeline (SCP), the Baku-Tbilisi-Erzurum natural gas pipeline (BTE), the Trans-Anatolian Natural Gas Pipeline (TANAP), the Turkey-Greece Interconnector (ITG), and the Trans-Adriatic Pipeline (TAP).
Karagol also noted that "Iran needs new markets to sell its energy and wishes to have better relations with foreign markets. Turkmenistan is another key country which aims to have more contact with external markets to its east and west along with Azerbaijan in the Caspian region."
Consequently, Turkey can become an energy-trading center through the southern gas corridor, he said.
Turkey was the fifth largest natural gas importer in the world in 2015 with 48 billion cubic meters (bcm) while Japan ranked first with 117 bcm and Germany second with 73 bcm.