Turkey eyes greater role as gas re-exporter to Europe: Bayraktar

Turkey is eying a greater role as a re-exporter of natural gas to Europe, Turkish energy minister Alparslan Bayraktar said in an interview on Turkish television broadcast on Sept. 20.

Bayraktar said the country's gas pipeline system operated by state-owned Botas together with its five LNG import facilities -- three operated by Botas and two by private companies -- meant it had more import capacity than it needed to meet its own gas demand.

"We consume approximately 50 Bcm/year of gas, but we have the capacity to receive approximately 75-80 Bcm/year," he said.

Bayraktar said that, thanks to Botas' investments over the past decade, the Turkish gas system had 25-30 Bcm/year of extra import capacity which "automatically" creates the possibility of a trading center.

"If there is an export opportunity and we can reach an agreement with customers in Europe, we can supply LNG from many different sources," he said, highlighting the US, Qatar, Oman and Trinidad and Tobago as possible suppliers of LNG.

Turkey's own gas production from its Sakarya field in the Black Sea was also a potential source of supply.

Bayraktar said he refers to the mix of gas from different sources in Botas' system as "Turkish blend" gas.

"We can use this for the needs of countries in southeastern Europe," he said, pointing to the Trans-Balkan pipeline that up to 2020 transported Russian gas to Turkey via Ukraine, Moldova, Romania and Bulgaria.

Since the start of the TurkStream pipeline, gas flows through the Trans-Balkan pipeline have been reversed and the link can now be used to re-export gas from Turkey to Bulgaria, Romania, Hungary and Serbia.

Botas already has contracts to supply gas to Bulgaria, Romania and Hungary and has indicated its interest to supply other regional markets.

LNG deals

Turkey has recently been following an aggressive policy of gas supply diversification, and of diversification away from gas for power generation.

Over the past five months Botas has signed three new LNG purchase agreements with TotalEnergies, Shell and ExxonMobil, and at the end of last year renewed its legacy LNG deal with Algeria.

Bayraktar made no mention of Turkey's pipeline gas imports, what percentage they would contribute to the "Turkish Blend" gas or what role they could play in Turkey's gas re-export plans.

Turkey's long-stated plans to establish a gas trading hub in northwest Turkey have raised concerns that this could allow more Russian gas to enter European markets.

Botas currently imports up to 16 Bcm/year of Russian gas via the Blue Stream pipeline under a legacy contract which expires at the end of 2025 and up to 5.75 Bcm/year via the TurkStream under spot deals that also expire at the end of 2025.

In addition, six private Turkish companies hold contracts to import up to 9.75 Bcm/year of Russian gas via TurkStream, although the status of the contracts is unclear.

All hold valid import licenses issued by Turkey's energy regulator EPDK, but three have imported little or no gas since 2019 and none have imported any gas since March this year.

Botas can also import 6 Bcm/year of Azerbaijani gas via the TANAP pipeline under a legacy contract which expires in 2033 and last year imported a further 4.3 Bcm under annual, quarterly and monthly spot contracts, the umbrella agreement for which expires at the end of this year.

Turkey also imports up to 9.6 Bcm/year of gas via the Iran-Turkey gas pipeline under a legacy contract with Iran which expires in July 2026.

Exploration activity

Bayraktar also said Turkey was continuing to prospect for new reserves in the Black Sea.

He said that state upstream operator TPAO -- which operates Turkey's 710 Bcm Sakarya gas field -- is about to start drilling the Akcabeyli-1 well in the western Black Sea, which it is hopeful will identify a new gas reserve.

Bayraktar also said Turkey remained interested in prospecting for hydrocarbons in the Mediterranean, pointing out that Turkish drill ships had drilled nine exploration wells in the area without identifying any new reserves.

Six of those wells were drilled in areas claimed by both Cyprus and Turkey as part of their respective Exclusive Economic Zones and three in areas claimed only by Turkey.

In 2020 a survey vessel operated by TPAO also conducted 3D seismic surveys in areas claimed by both Turkey and Greece.