Bank Approves Turkey Storage Loan
The World Bank has approved a $600mn loan for the underground gas storage (UGS) expansion project in Salt Lake (Tuz Golu), central Turkey. The WB has already allocated $325mn (2005) and $400mn (2014) to this project and its capacity now stands at 1bn m3. “The gas storage expansion project will support government efforts to quintuple the size of the storage facility at the same location,” the WB said May 22.
The project aimed to increase the reliability and security of gas supply by expanding the UGS and will be implemented by Turkey’s state gas transit operator Botas. The Asian Infrastructure Investment Bank (AIIB) is a co-financier of the project. The lending instrument for the project is an International Bank for Reconstruction and Development (IBRD) flexible loan with 22.5-years maturity, including a 7-year grace period.
UGS expansion project will consist of three components: an UGS facility within a salt formation close to Tuz Golu; construction supervision monitoring of the project; and an environmental and social impact assessment (ESIA) and resettlement action plans (RAP) monitoring.
The project is expected to help Turkey lower its greenhouse gas emissions by reducing dependence on coal, especially in the winter months. Increased flexibility in the natural gas supply will also support greater integration of renewables as they become a larger part of Turkey’s energy mix. Turkey's gas demand hit an historic high of 53.5bn m3 in 2017, a sixth more than in the year before, although Turkey is trying to cut its dependence on energy imports.
“The facility will help to ensure that enough natural gas is available to consumers at all times, especially when global supplies are tight or when demand escalates suddenly due to winter cold”, World Bank director for Turkey, Johannes Zutt said. The Tuz Golu UGS project was agreed between Botas and Chinese Tianchen Engineering Company in 2012. Construction started in 2013.