Why Turkey Rejects Doubling Iranian Gas Imports
Iranian Oil Minister Bijan Namdar Zanganeh announced on 14 April that Tehran offered Ankara a doubling of Iranian natural gas imports for getting a discount in gas prices however Ankara rejected the offer.
The National Iranian Gas Company announced on Tuesday that the country’s gas export to Turkey increased by 1 billion cubic meters (bcm) to 9.69 bcm during last fiscal year. Iran’s fiscal year ended on 20 March.
According to this report, Turkey should have imported 10 bcm of Iranian gas, but “Turkey’s state company Botas didn’t have enough capacity for importing this volume of gas.”
Stanislav Pritchin, research fellow of the Center for Central Asian, Caucasian and Volga-Urals Studies of the Institute of Oriental Studies (Moscow) explained to Natural Gas Europe that “there is not any ready infrastructure neither in Iran nor in Turkey’s territory for a significant gas delivery increase. On the other hand, the existing gas hub in the eastern Anatolian city of Erzurum doesn’t have the capacity to receive 20 bcm of gas in annum from Iran.”
The 9th cross-country gas pipeline is projected to transfer 100 mcm/d of gas towards the north-western borders with Turkey. The 1,863-km long pipeline would have 17 pressure booster stations.The cost of this pipeline is estimated to reach $6 billion.
Pritchin added that Iran has an approximate 20 percent share in Turkey’s gas imports and there is no room for significant discounts to compete with Azeri or Russian gas prices.
“On the other hand, Azerbaijan has an agreement to deliver more 6 bcm/a of gas to Turkey through TANAP by 2018,” he said.
Turkey’s current gas consumption stood at approximately 49 bcm/a last year, however this figure is expected to reach 50.8 in 2015.
According to the International Energy Agency’s estimations, Turkey’s gas consumption in 2018 would reach 59 bcm/a. This figure also would stand at about 70 bcm/a in 2030. Therefore, there is no room to double Iranian gas imports.
Power generation sector shares about 48 percent of Turkey’s total gas consumption, but Ankara aimed to increase power generation via new hydro and nuclear power plants.
Turkey planned to reduce dependency on imported fossil fuels through gradual commissioning of nuclear power into Turkish energy mix. The country intends to establish a nuclear capacity of more than 10.000 MW by 2030.
Turkey is also Iran’s second biggest power client, importing about 2500 million KWh electricity from Iran.
Ilham Shaban is Director of the Azerbaijan Centre for Oil Studies, in Baku