Turkey Reverses On Trans-Caspian Gas Line

November 2012, Vol. 239 No. 11

Turkey is revisiting the trans-Caspian gas pipeline project after a decade-long hiatus by aligning with the European Union, Azerbaijan and Turkmenistan to back transportation of Turkmenistan gas to Turkey and onward to Europe.

Ten years ago, Turkey failed to capitalize on the first trans-Caspian pipeline project but the EU is reactivating the framework of the Southern Gas Corridor to Europe, along with the Azerbaijan-led Trans-Anatolia Pipeline project (TANAP) in Turkey. Ankara now sees great opportunities in the large-capacity pipeline.

At recent meetings Turkey confirmed it intends to import and transport Turkmenistan’s gas through the proposed trans-Caspian and TANAP pipelines. Turkey would “buy” certain volumes for its own needs while allowing other volumes to “flow beyond Turkey.”

TANAP is designed as a scalable pipeline, its capacity to be increased in four consecutive phases by adding parallel loops and compressor power, in step with production growth upstream. Even before Ankara’s offer to Azerbaijan, executives had hinted at an ultimate capacity of 60 Bcm, reflecting an interest in maximizing the gas flow through Azerbaijan and the TANAP pipeline to Europe.

Planning assumptions envisage the start of TANAP construction work in late 2013 or early 2014, first gas flow in 2018 (when Shah Deniz Phase Two production is due on stream), and scaling up TANAP’s capacity to 16 Bcm per year by 2020, 23 Bcm by 2023, and 31 Bcm per year by 2026, at an estimated cost of $7 billion for reaching the 31 Bcm capacity.