Could Turkey Be Working With Iran on Gas Pipelines?

In the coming years Turkey hopes to emerge as a major energy nation. From its strategic location on the edge of Europe, it is ideally placed for the transfer of natural gas and oil from petroleum-rich Middle Eastern states.

The Ministry of Energy and Natural Resources predicts that natural gas trade will increase in the next five years and will be the most used energy source worldwide by the year 2015.

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Natural gas production in Turkey was increasing in previous years; however, there was a 27 percent decrease year-on-year in 2009. The country also plans to up the storage capacity for natural gas by 77 percent by 2014.

Continued growth within the Turkish economy means that demand for energy is only likely to grow and the ministry is placing much focus on increasing its use of domestic supplies and boosting energy security.

Imports

Leading up to the year 2020 Turkey predicts that its oil and gas imports will cost the country $475 billion (£303 billion) and some of this could be supplied by Iran.

The Iranian oil ministry recently released a statement in which it claimed that it had signed a €1 billion (£822 million) deal to pipe gas to Turkey.

Javad Oji, head of the National Iranian Gas Import Company, told the Iranian Oil Ministry's official website SHANA: "The pipeline will enable Iran to export 50 to 60 million metres of gas per day ... It will be constructed within three years."

Som Petrol confirmed that it was involved in the deal following denials from the Turkish government that it has been involved in the plans in anyway.

Turkish energy minister TanerYildiz, was quoted as saying: "Neither the government of Turkey nor Botas are involved in the €1 billion pipeline deal with Iran. Several private firms are known to be interested in a pipeline (with Iran)."

Nabucco Pipeline

Iran has high aspirations for the transfer of natural gas to European markets, despite international sanctions against the country, and a pipeline through Turkey is likely to play a major part in this.

Following a meeting with the Turkish energy ministry this year, Iran's minister of foreign affairs Manouchehr Mottaki said the energy forms a major part of relations between the two countries and mentioned collaboration on theNabucco pipeline, which will be constructed from the Georgian/Turkish and the Iraqi/Turkish border to Baumgarten in Austria.

An intergovernmental agreement on the pipeline was signed by Turkey earlier in the year, which means that all countries involved in their project have now signalled their approval.

Reinhard Mitschek, managing director of the Nabucco Gas Pipeline, said: "The signing of the Intergovernmental Agreement represented a significant breakthrough in the realisation of the project. No other project of Nabucco dimensions has a treaty in place that guarantees gas transit under equal and transparent conditions for all customers."

The Nabucco company has since been involved in a public dialogue with citizens in the Turkish cities of Ankara, Eskisehir, Bursa, Balikesir, Tekirdag and Kirklareli to discuss concerns surrounding the project.

Privatisation

Turkey has ambitious plans for privatisation to increase the competitiveness of the economy and the natural gas infrastructure is playing a part in this. A tender process was first opened up on the Baskent Dogalgaz company in 2008 and is now reaching its conclusion.

A number of companies were involved in the bidding for 80 percent of the company, which controls the natural gas grid in Anakara–which distributes gas to 1.2 million homes making it the second largest in the country.

Turkish firm MEKA MMEKA placed the highest bid of $1.211 billion, beating out competition from six other firms, Reuters reports. AnkaraMetropolitan Municipalityand its affiliates will continue to control 20 percent of the grid.