Turkey Plans 'Sustainable' Gas Strategy
Turkish President Recep Tayyip Erdogan has announced plans for a "sustainable" gas supply security strategy, as one of the aims of his '100 days' programme announced August 4.
Details of the strategy were not released but other points in the announced programme include plans to expand Turkey's underground gas storage capacity, plans to expand the country's gas distribution network to allow it to supply 66 million of Turkey's 81mn population, up from the current 63mn, plus plans to support the launch of the EPIAS gas trading hub scheduled to start operating September 1.
Plans already exist for a sixfold expansion of state-owned Botas' Tuz Gollu underground gas storage facility to 6bn m3, with the first phase due to be operational by end of 2019, and the rest by end-2023.
Although not specifically mentioned, the "sustainable" strategy appears likely to involve a continuation of the country's existing policy of attempting to diversify away from natural gas as the primary fuel for power generation in favour of domestic alternatives, which has already caused gas demand to fall. Turkish gas consumption in January to May 2018 was 23.076bn m3, down by 7.2% year on year.
Also detailed were plans to privatise two state-owned coal fields for development for power generation and for the tendering of a long stalled project for a 1 GW power plant to be supplied with coal from a third state owned coal field in northwest Turkey.
Further more vague references were made to expanding Turkey's power generation from renewable energy sources: again no details were given in the programme itself but Turkey's state Anatolia news agency reported Erdogan as mentioning plans for tenders for 3 GW of new solar capacity; plans for a third nuclear power plant in addition to the one under construction; and a second in the planning stage.
If previous announcements about reducing dependence on imported gas for power are borne out, Turkey will need to significantly boost the alternatives. The 49.5% price hike in gas sold to generators announced last week by state gas importer Botas is expected to severely hurt the profitability of many of the country's gas fired power plant with analysts warning of potential bankruptcies and plant closures. Small private gas producers active onshore northwest Turkey however have welcomed higher gas prices.
Some smaller gas fired plants are expected to be taken off line once the summer peak power demand period ends and four plants totalling 4.6 GW, built in the late 1990s under concessionary schemes, are due to lose their 20-year offtake guarantees by end-2019 and are expected to be either closed and dismantled, or mothballed against possible future power shortages, which some analysts warn are now inevitable due to the small number of major new plants in development. OMV announced in May that it was divesting an 890 MW modern gas-fired power plant; the deal is scheduled to complete in 4Q2018.