Azerbaijan gaining power in Turkey’s energy market

ISTANBUL - Hürriyet Daily News

Turkey wants to become a regional energy hub by constructing the Trans-Anatolian Pipeline, which will also help the energy-hungry country diversify its natural gas supplies for the ever-growing domestic consumption. AP photo

Turkey and Azerbaijan are near reaching an agreement on the construction of a major pipeline that would carry a vast amount of natural gas to European markets, according to a top Azeri energy official. 

Turkey and Azerbaijan will “soon” agree on construction of the Trans-Anatolian Pipeline (TANAP) that will carry natural gas to Europe, potentially rivaling the European Union-backed Nabucco project, said Rovnaq Abdullayev, president of Azeri state-owned State Oil Cooperation of Azerbaijan (Socar) during a televised interview on ANS TV on Feb. 12, Bloomberg News reported.

The two countries might finalize the intergovernmental agreement on the Trans-Anatolian Pipeline Project during Turkish Prime Minister Recep Tayyip Erdoğan’s planned visit to Baku, according to the Azeri official. The official visit of Erdoğan to Baku would take place this summer, reported the Azeri Press Agency (APA) on Feb. 4.

“We want to sign the final agreements on TANAP by March or April,” said Abdullayev. He said the pipeline would cost nearly $5 billion to $7 billion, Reuters reported yesterday. He also said some European firms were interested in taking part in the project.

Parties had signed a memorandum of understanding in December 2011 on building the 2,000-km-long pipeline. The pipeline will transfer nearly 16 billion cubic meters of Azeri gas per year to Turkey’s western border and deliver to European markets.

Socar to bid for gas distribution 

As the energy ties between Azerbaijan and Turkey develop, Socar readies to bid for İgdaş, Istanbul’s gas distribution company, said Abdullayev. 

He said Socar was interested in distributing the natural gas it sold to Turkey, Bloomberg News reported yesterday. The company looks to strengthen its presence in Turkey by investing in Turkey’s sole refinery Petkim’s container port in the western province of İzmir, according to a Socar press release distributed to reporters during a signing ceremony yesterday in Istanbul. 

The company will invest $400 million to build the container port by 2014. The port will have an annual handling capacity of 1.5 million twenty-foot equivalent units (TEU), and Hague-based APM Terminals will operate the port for 28 years. 

Owning 100 percent shares of Petkim, Socar also aims to construct a 600 megawatt capacity power plant based on petroleum coke and coal, said Abdullayev, noting the company was preparing a study on using Turkey’s coal reserves to generate electricity, said Reuters.