Turkey’s energy role to continue after coup attempt: Experts

“Turkey’s regional energy role remains a key element of Turkey’s economic dynamism,” said David Merkel, a senior fellow at Dinu Patriciu Eurasia Center of the Washington-based Atlantic Council.      

“If Turkey returns to stability and has competent officials in energy-related agencies and ministries, I suspect the impact [of the coup attempt] will be minor,” he added.

The coup attempt on July 15 has summoned questions about ongoing energy projects in the country, which acts as a strategic bridge between the gas-rich Caucasus and energy-hungry Europe.

Experts said Turkey’s key position between these two regions would not be affected by the failed coup attempt.

“Turkey’s importance for European energy security will not be significantly reduced,” Merkel said.    
  
“I think Turkey is too critical to European energy security, especially in efforts to reduce dependency on [energy resources from] Russia for Europe,” he added.

Around 30 percent of Europe’s annual natural gas consumption is dependent on Russian supplies. Europe has been trying to lower that dependency through diversification, and Azerbaijan’s gas resources in the Shah Deniz field as a major supply source have contributed to this aim. 

Turkey’s Trans Anatolian Natural Gas Pipeline Project (TANAP) is an integral part of the Southern Gas Corridor that plans to carry Azeri gas via Georgia, Turkey, Greece, and Albania through to Italy. TANAP is planned to become operational in 2018 with an initial capacity to carry 16 billion cubic meters (bcm) of gas. Total capacity is planned to increase to 23 bcm by 2023 and to 31 bcm by 2026.      

Volkan Özdemir, head of the Institute for Energy Markets and Policies (EPPEN), said TANAP will continue as planned, adding that most of its investment came from Azerbaijan.

“Investments in Turkey’s energy sector have not come from Europe in recent years. It is mostly foreign investors outside Europe that finance it,” he said.


Rapprochement with Russia      

Although Merkel said Turkey’s key regional position would help European energy security by lowering its dependence on Russian gas, Özdemir highlighted the fact the recent attempt at reconciliation by Turkey and Russia after relations soured last November could indirectly affect Europe.

“If the Turkish Stream gas pipeline project comes back on the agenda, this could have an indirect impact on Europe,” Özdemir said.

He added that there were two conditions for the Turkish Stream project being taken off the shelf - the rapprochement between Turkey and Russia and the impact of the Nord Stream II pipeline project coming online.

The Nord Stream II project plans to deliver 55 bcm of Russian gas under the Baltic Sea to Germany, and further into France, the U.K., the Netherlands and Denmark.      

The Turkish Stream, which was initially planned to carry 63 bcm of gas to Europe via Turkey, had its project capacity trimmed down to 31 bcm later on.

However, the project was shelved after Russia and Turkey failed to agree on the existing gas price discount which Russia was due to apply on Turkey’s gas imports. Turkey’s downing of the Russian jet last November worsened bilateral relations, leaving a stalemate in talks on the project between both sides.    
 
“If a decision to build the Nord Stream II is taken, Russia will scrap the Turkish Stream,” Ozdemir warned, adding that “relations between Russia and Europe remain uncertain.”      

“I believe Turkey and Russia will get closer again after the failed coup attempt. And if the two countries can agree on building the Turkish Stream, Russia will be able to have another gas route to Europe through a southern corridor. That is something Europe would not want,” he explained.