GGP: Turkey’s role in natural gas – Becoming a transit country?
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.
This Institute of Energy Economics at the University of Cologne (EWI) Working Paper was originally published in January 2017.
This paper analyses the possible future role that Turkey can play in European natural gas markets. We employ a global gas market simulation model, COLUMBUS, to assess the outcomes of different scenarios concerning natural gas supply routes to Europe through Turkey up to 2030. The results imply simply that under current conditions, i.e., a more competitive environment in European gas markets leading to low gas prices, Turkey’s role would be of only minor importance. In accordance with various scenarios presented in this study, Turkey’s role is seen at its most important when European demand increases and Russia exerts power in the European markets.
Turkey’s long-lasting ambition to become a natural gas transit country, if not a hub, has been motivated by the country’s unique geographical location as a natural bridge between major gas producers in the Caspian, Middle Eastern and Russian regions and one of the major consumers, Europe. Turkey’s importance and the likelihood of her being a transit country have remained relatively high during the periods of possible threats to sustainable natural gas supplies to Europe. To date continental Europe is one of the largest natural gas consuming regions in the world. According to BP (2014), after increasing from 338.1 billion cubic meters (bcm, hereafter) in 1991, natural gas consumption in the European Union 28 (EU, hereafter) peaked with 502.2 bcm in 2010. Although there has been a slight decrease since then, the International Energy Agency’s (IEA, hereafter) 2014 World Energy Outlook (WEO 2014, hereafter) New Policies Scenario estimates that natural gas demand in Europe will increase by an annual compound rate of 0.7% reaching 610 bcm by 2040 (IEA, 2014a). Most of this demand will be met by imports, as has so far been the case. Indeed, European import dependency is expected to grow even more rapidly due to declining local production in countries such as the Netherlands and the UK. WEO 2014 also suggests that Russia will continue to be the major source of natural gas supplies to Europe.
Istemi Berk, Simon Schulte
The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.