HomeMediaLatest NewsTurkey has found new reserves of natural gas: does it need Russian gas now?

Turkey has found new reserves of natural gas: does it need Russian gas now?

19 October 2020

Belogoryev Alexey M. Deputy Principal Director on Energy Studies, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies commented to News.ru on the prospects for the Turkish gas market development and the Russian gas export to Turkey.

By the way, the prospects for the Sakarya field are ambiguous, says Aleksey Belogoryev, Deputy Director for Energy at the Institute for Energy and Finance.

"There are no examples of effective development of such deposits in the Black Sea yet. There is the experience of Romania, but so far not particularly successful. I doubt that Turkey will be able to commission a new field by 2023. Of course, if you invest a lot of money, you can make it in time, but given the current state of the gas market, there is no confidence that foreign companies will actively participate in development of these reserves," he told.

Despite the large volume of resources of the Turkish field, its annual production level can still be estimated at only 8-10 billion cubic meters, the expert notes. This will cover a part of domestic consumption, but under a favorable scenario, additional volumes may be offset by increased demand for gas in the Turkish market. Although for this, the country must first overcome the economic crisis.

Alexey Belogoryev, in turn, believes that the main reason for the reduction in Russian gas supplies to Turkey is economic. The fact is that the price of gas in the Turkish contracts of Gazprom is still tightly tied to oil quotes.

The main reason for the drop in supply volumes in the first half of the year is the price. Russian gas turned out to be more expensive than alternative supplies. This is a question for Gazprom's marketing policy, why the company chose to maximize revenue instead of retaining its market share. Declining supplies to Turkey has been observed for several years. The market is being lost, and this is obvious. And this is doubly strange in the year when the Turkish Stream was introduced, which casts doubt on the economic efficiency of this project, the expert noted.

In the second half of the year, the situation will be improved due to lower oil prices, the economist said. Nevertheless, given the fall in the first half of the year, gas exports to Turkey are likely to be lower than last year.

The decline in Russian gas exports to Turkey jeopardizes the Turkish Stream gas pipeline launched this year. The throughput capacity of its first line, intended for supplies to the Turkish market, is 15.75 billion cubic meters. But there is also the Blue Stream with a capacity of 16 billion cubic meters.

Blue Stream was often underutilized before. Only four years ago, it began to be loaded almost completely - up to 14 billion cubic meters - because of the harsh winters in Iran and the shortage of supplies from the Islamic Republic, Victor Nadein-Raevsky said.

A similar fate may await Turkish Stream, says Aleksey Belogoryev. According to him, there is a risk that part of the capacity of the new gas pipeline will be underutilized. At the same time, Turkey is likely to continue to use Russian gas as insurance - to ensure peak demand, as well as in case of supply disruptions, as was the case, for example, after the explosions on the Iranian gas pipeline, the expert noted.
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