THE ROLE OF NATURAL GAS IN TURKEY’S ENERGY FUTURE

Dr. Sohbet Karbuz

INGAS 2009Istanbul, 10 June 2009

OUTLINE

Natural gas in Turkey’s Energy Demand

Turkey’s future gas supply

Turkey: a gas hub, or corridor, or transit ?

Is the EU serious about energy security ?

Concluding remarks

Coal

29.9%

Oil

14.3%

Com Renew55.0%

Ncom Renew0.8%

10.7 Mtoe in 1960

Coal

28.5%

Oil

30.0%

Natural gas32.0%

Com Renew5.0%

Ncom Renew4.5%

97 Mtoe in 2008

Coal

29.4%

Oil

23.8%

Natural gas32.8%

Nuclear3.6%

Com Renew1.1%

Ncom Renew9.2%

251 Mtoe in 2030

90% fossil fuel 86% fossil fuel

business as usual is not sustainable

TURKEY’S ENERGY DEMAND

Source: OME

Primary Energy Production

Demand will grow much faster than production Energy import dependency will worsen, 74% by 2030

Progress in renewable energy developments has been very slow.

GAS DEMAND IN EURO-MED (MTOE, 2005 VS 2030)

Coal: #4 #2 Oil: #8 #6 Total: #7 #3 Ele: #7 #1,2

Power generation

54%

Industry12%

Residential & Services

33%

Other1%

Natural gas consumption in

2007:30 Mtoe Power

generation54%

Industry10%

Residential & Services

35%

Other1%

Natural gas consumption in

2030:83 Mtoe

Sources: IEA, BOTAȘ, and OME

Turkey’s Gas Demand

Power generation is and will remain the key sector

41%

29%

22%

Gas will remain #1, but its share will decline from ~50% in 2007 to 41% by 2030

Gross Electricity Production by Fuel

Turkey’s Natural Gas Demand

Gas import dependency 97% in 2008

more tomorrow

Turkey’s Natural Gas Supply

Domestic gas production in the future is not very promising

Natural Gas Dependency, 2007

Natural Gas Imports and Dependency on Russia, 2007

Chemchemal

Khor Mor

Akkas

??

Tamar, Dalit ??

??

Is the EU serious about gas supply security?

Supports politically motivated sanctions against …. Lacks far sighted coherent policies and priorities…. Diversification of supply, but

EU pledged €1.85 bn for modernization of Ukraine’s pipelinesBUT, The European Energy Programme for Recovery allocation for Gas Infrastructure is €1440 M Of which Nabucco €200 M (€250 M, German opposition/Polish

support)

Russia turns the screw on Ukraine Nord Stream and S. Stream will compete more with

the current transport system Revise Energy Charter Treaty? Energy should not become the currency of power in

EU-Turkey relations

Future of Nabucco

South Stream vs Nabucco: escalating “competition” 8 May 2009 Prague: Nabucco (or Southern Corridor) 15 May 2009 Sochi: S. Stream (63 bcm/yr) , signatures… 17 May 2009: OMV-MOL announcement of Iraqi project 25 June 2009 Nabucco IGA?

15% off the table ?? Azeri tango with Russia (not really) Turkey, if it has a role, should act as a bridge, not a

hub…. Develop 4 hubs (in Baku, Romania, Greece, Italy)….explore alternatives (WS) “even if an acceptable Corridor Agreement would (or would not) be found with Turkey”….include LNG development in Romania and perhaps Bulgaria! Jozias Van Aartsen, European Coordinator for Southern Corridor (known as Nabucco co-ordinator), Activity Report: September 2007-February 2009.

Conclusions Turkey is an emerging regional

and global energy player. A geostrategic energy hub and

corridor for producers & consumers; IOCs & NOCs; and investors

But lacks a comprehensive, forward looking energy (security) strategy. The world “strategy” should be used properly

Policy decisions should not be formulated by looking through the pipelines

Thank you for your attention.

karbuz@ome.org