TURKPULSE No:6 ............................OCTOBER 28th, 1999
TURKMEN GAS TO TURKEY, IN ADDITION TO RUSSIAN GAS
The anti-gas lobby has recently launched an offensive in the media against the Ecevit Government’s energy plans and projections. They feverishly try to prevent the finalisation of the Blue Stream pipeline, but it is already too late as the first payment of $55 million has been made to the contracting company. President Clinton has to make a choice about joining in Turkey’s energy projects for the new millennium rather than obstruct some of them. Indications are that American realism will eventually come round to that point before long when it will be plain sailing for Turkey to overcome its current economic problems. Some water may have to run under the bridge before that point is reached though.
According to the overall revision made in Turkey’s long-term energy plans as from March 1996, natural gas imports will replace oil in generating electricity in the new millennium and the source of these imports will be diversified as much as possible. (For details see the previous article on the Baku-Ceyhan pipeline). It is estimated that in 2010 Turkey will consume 54-billion m3 natural gas, which will rise to 80-billion m3 in 2020. The Energy Ministry later updated this last figure to 87-billion m3 and other revisions are always possible, affirm competent authorities.
The MFA’s principles for energy procurement call for not being dependent on a single country or source in these imports. Consequently, Ankara has decided to import about 30-billlion m3 of this gas from Russia and 30-billion m3 from Turkmenistan, in addition to 10-billion m3 from Iran and more (in LNG form) from other countries such as Algeria, Libya, Egypt, in the second decade of the new century.
Anti-natural-gas lobby launches an offensive
A strong lobby guided from a mysterious centre takes exception to these figures and maintains that they are unrealistic targets arbitrarily, rather than scientifically, determined. They stress that the Energy Ministry’s figures established in 1990 set Turkey’s natural gas consumption figures for the year 2010 at 19-billion m3. In 1995 the same department upgraded it to 31-billion m3 and now to 54 billion m3. They claim that there is no convincing reason for increasing these figures like that and that it is done by pro-Moscow bureaucrats and politicians to cover up the over dependence on Russian gas in the following years.
According to this lobby, which is nowadays especially active in the media to stop the finishing touches to the Blue Stream project, Turkey’s natural gas consumption will be 31-billion m3 in 2010 as the 1995 figures indicate. It means natural gas will totally be imported from Russia and that the trans-Caspian pipeline to carry Turkmen gas to Turkey will fall through because Turkey cannot possibly consume so much natural gas.
Apparently influenced and persuaded by the influential oil and gas multinationals, President Turkmenbasi Niyazov voiced these views to the Turkish delegation headed by Energy Minister Cumhur Ersumer at the official talks in Ashkhabad a few weeks ago. Furthermore, he conducted the secret official talks before the media as an unprecedented practice in diplomacy. It was obvious that the President of Turkmenistan was as mindful of the public opinion’s pressure on Ankara against the Blue Stream as is the anti-Russian lobby in Turkey.
Blue Stream is no hindrance to Turkmen gas, stresses Ersumer
Deputy PM Ersumer’s answer to President Turkmenbasi and the lobbyists was that the Blue Stream does not hinder the realisation of the trans-Caspian pipeline and that Turkey’s pledges to Turkmenistan about importing natural gas from that country at the agreed upon amounts were in force. If Turkmenistan demanded further assurances Turkey was ready to consider them. If Turkmenistan, with its 5 million population, is consuming 7-billion m3 natural gas a year today why shouldn’t Turkey, with its 70 million population in 2010, be able to consume 54-billion m3, went his argument.
As for the claim of the Anti-Blue Stream lobby that Turkey will not be able to handle 87-billion m3 natural gas in 2020, Ankara points to some reliable international research corporations’ figures and projections. The lobbyists say that there will be a glut of natural gas in Turkey if 30-billion m3 is imported from Russia, 30-billion m3 from Turkmenistan, 10-billion m3 from Iran and more from Algeria, Egypt and other sources.
Ankara’s answer is that there will be no such problem. In the year 2010 west Europe’s natural gas demand will be 570-billion m3, according to the calculations of CERA (Cambridge Energy Resaerch Associates), a world famous international research corporation. The total production of Russia, the North Sea and Algeria in the same year will be 80-billlion m3. There is no reason why one-third of this gas should not pass through Turkey. It can easily import sufficient gas from Turkmenistan and Azerbaijan (which has recently discovered 1-trillion m3 gas) and re-export to the West the excess of its own demand.
With this belief, Ankara has given a spur to the construction of both pipelines. For the Blue Stream from Russia, $55 million advance payment has been made to two Turkish companies, Oztas and Haznedaroglu, which will build the Ankara-Samsun pipeline for $329 million. Also, a number of companies will build the pipeline that will be connected to the Turkmen and Iranian natural gas pipelines. This second group of companies have also got advance payments to complete the pipeline by April 30th, 2000, as Turkey is under an obligation to start receiving the Iranian natural gas by May 27th, 2000, the latest. (For the details see TURKPULSE of February 15th, 1999) (Link to POT 91, Turkey being woven with natural gas pipelines).
The "Eastern Anatolia Natural Gas Main Transport Pipeline", to be built in five stretches, will cost $635 million. They are being built in such a way that they can be linked to Russia, Iran and the Baku-Ceyhan pipeline in a short time if one of the suppliers stops pumping the gas. The LNG imports from various countries will be an added assurance against a possible bad surprise in future.
Blue Stream replaces another pipeline through the Caucasus
Before the Blue Stream under the Black Sea, Turkey and Russia negotiated the "Laser Project" for imports of 16 billion m3/year Russian natural gas to Turkey and Israel via Caucasus. Canada and Israel also participated in these talks, but when they pulled out the project fell through at the end of 1997after years of negotiation. It gave way to the Blue Stream during the Erbakan Government and the ensuing Yilmaz-Ecevit Government continued with this project. During Ecevit’s minority Government before the April elections the project underwent a tough period, because the Energy Minister of that Government, Ziya Aktas (DSP-Istanbul), claimed to be a hidden American national, was not very receptive to the Blue Stream idea. One good thing that came out of Aktas’s time in government was that the Russians agreed to pledge to Turkey that if they failed to build the Blue Stream for delivering the gas to Samsun, they would compensate the cost of the Ankara-Samsun pipeline to Turkey by supplying additional gas from the western pipeline. It reduced Turkey’s business risks for the Blue Stream to nil, but still the Americans are strongly objecting to this project contrary to the Clinton Administration’s initial stance. President Clinton’s special advisor for the Caspian oil and gas, Ambassador Richard Morningstar, said in September 1998:
"We believe Russia can play an even greater role in the East-West transit corridor by helping Turkey to meet its energy needs by shipping gas via the Caucasus and into a Turkmenistan-Turkey pipeline. We believe it makes no sense to undermine the independence of the Caspian NIS (newly independent states) by tying their hydrocarbon exports into the pipeline system of Iran, one of their primary competitors."
President Demirel said to the media during his visit to Azerbaijan last week that it was not possible to do anything in this region despite Russia and that they would go on with the Blue Stream project. American rulers’ statements show that this is exactly how Washington is feeling. So Turkish rulers are determined to turn a deaf ear to the campaigns of the lobbyists against the Blue Stream. Last week, Sukru Elekdag, a one time top Turkish diplomat and Ambassador to Washington, joined these lobbyists with an article in Milliyet (25), but his facts and figures were grossly mistaken.
A multinational consortium headed by American company, PSG, has pledged to Turkey to complete formalities for the financing of the trans-Caspian pipeline project in the year 2000, to start the construction in 2001 and bring Turkmen gas to Turkey’s eastern frontier at the end of 2002. Naturally everything depends on the American Government’s stance. Even though nothing tangible came out of PM Ecevit’s recent visit to Washington, mostly because of the American disenchantment of the Blue Stream, President Clinton’s forthcoming state visit to Turkey is significant. It is proof of the fact that the US Government will eventually give the green light to financing the trans-Caspian project and Turkey’s energy projects that require $30 billion until 2020.
PM Ecevit’s visit to Moscow next week, President Clinton’s State visit to Ankara a few days later and the activities going on for Turkey's full membership to the EU are all milestones in this country’s efforts to strike the balance in international relations in the new millennium. uras@ada.net.tr, October 28th, 1999