Turkiye Gains Capability to Export Black Sea Gas and LNG to Europe

It is stated that Turkiye, in addition to the natural gas produced in the Sakarya Gas Field, can export the gas it purchases under long-term contracts and in liquefied form to Europe, depending on the demand situation.

Energy experts made evaluations about the Mining Law, which contains regulations in the field of energy, and the Law on Amendments to Certain Laws.

Dr. Sohbet Karbuz, Oil and Gas Director of the Mediterranean Energy and Climate Organization (OMEC), referring to the article of the law “Liquefying the natural gas produced and/or imported domestically and exporting it abroad or reselling it domestically”, said “This enables the export of some of the production in Sakarya and the fields to be discovered in the future as LNG.”

Karbuz stated that it is possible to export some of this gas if the contracts under which Turkiye purchases gas through pipelines give the right to “re-export”.

Stating that the Blue Stream with a capacity of 16 billion cubic meters will expire next year and the Iran contract with an annual capacity of 10 billion cubic meters will expire in 2026, Karbuz said, “If these contracts are to be renewed, it is necessary to obtain the reexport right. When the contract is negotiated, a similar issue should be brought to the agenda for Azerbaijani gas.”

“We can sell excess gas to foreign markets”

Karbuz stated that the “final delivery point” clause in Turkiye’s long-term liquefied natural gas (LNG) contracts should be reviewed and continued as follows:

“If these are done, it will undoubtedly create an advantage for Turkiye because Turkiye, which is an important actor in the global LNG market, has not entered the LNG trade as far as notification until now. Considering that the ratio of LNG trade in total gas trade will increase in the coming years, it is essential for Turkiye, which has been a passive actor until now, to turn to an active actor.”

Emphasizing that establishing and operating an LNG export facility is a business that requires technology and financing, Karbuz said that such a facility can be established either directly by a foreign investor or with a foreign partnership. Karbuz said, “If we manage to establish such a facility, we can sell the excess gas we produce and import to foreign markets when market conditions are suitable. This export will most likely take place in the spot market, considering our current import contract amounts. Therefore, LNG cargo is directed to the market that offers the best price. This could be Asia or Europe, but in any case, timing will come to the fore.”

Karbuz said that it is not known how much of the Black Sea gas can be exported and when, and added:

“Future market conditions and the production-consumption balance in Turkiye will determine this. If the price margin is in our favor, the export option will come to the fore. However, it should be taken into consideration that an LNG export facility can be built in at least 3-5 years. In other words, export from an LNG facility to be established in Turkiye is out of the question in the short term, but reexport of purchased LNG is a different event. “In any case, this change in law is very important in terms of paving the way for the private sector and establishing a freer, competitive and liberal market mechanism.”

“Turkiye can re-export LNG, which comes in liquid form and is stored in terminals”

Ana Maria Jaller-Makarewicz, Energy Analyst of the Institute of Energy Economics and Financial Analysis (IEEFA), also stated that if Turkiye’s natural gas consumption decreases and its production in the Black Sea increases, the amount of gas it will send to Europe may increase. “This may be the case. The volume of this export and how long it will continue may vary depending on the demand of European countries.”

Jaller-Makarewicz pointed out that Turkiye has the capacity to export some natural gas from Russia and Azerbaijan to Bulgaria and neighboring countries.

Stating that Europe’s total gas consumption has decreased by 20% in the last 2 years due to high prices, energy security and climate policies, Jaller-Makarewicz underlined that LNG demand is expected to peak by 2025 and decrease by 2030.

Jaller-Makarewicz pointed out that it may take 3 to 5 years to build LNG liquefaction terminals and said that if the demand is uncertain, it may be difficult to secure long-term contracts and make final investment decisions through these export terminals.

Jaller-Makarewicz stated that Turkiye’s LNG terminal usage rate was approximately 27% last year.

Tom Marzec-Manser, Global Gas Analysis officer at ICIS, which serves commodity markets, also stated that Turkiye can re-export LNG, which reaches the country in liquid form and is stored in liquid form at the terminals.

Marzec-Manser said that converting piped gas into LNG for commercial shipment would be possible with a liquefaction plant, and that this was a time-consuming and costly project.

Marzec-Manser stated that Turkiye can send excess gas coming through pipelines to Europe, and noted that the country can offer a more attractive trade environment with a competitive regulation in which many gas companies will operate.

Source: Trthaber / Prepared by Irem Yildiz

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