Turkey: A strategic route for energy

Turkey is making the most of its geographical location between the energy-rich Middle East and Central Asia region and consumers in Europe

Compared with its Middle East neighbours, Turkey’s oil and gas resources are negligible. According to the US government’s Energy Information Administration (EIA), in 2009, Turkey produced an average of just 53,000 barrels a day (b/d) of oil and a total of 0.7 billion cubic metres of gas. Oil reserves are an estimated 300 million barrels, while gas reserves take just 6 billion cubic metres.

Despite its dearth of hydrocarbons resources, Turkey’s location between the energy-rich Middle East and Central Asia region and energy-poor Europe means it plays a strategic role in balancing supply and demand in the Eurasia region.

Supplying Europe

Europe’s own oil and gas production is in decline, while consumption continues to rise. Gas demand is expected to be particularly strong in the medium term. According to a report published on 6 June by the EIA, a combination of factors, including the economic growth in China and the reduced appetite for nuclear power after the recent disaster at the Fukushima facility in Japan, mean that the world may be about to enter what it terms a “golden age” of gas.

Under this scenario, gas demand among European members of the OECD group of developed nations would increase to 667 billion cubic metres in 2035, from 555 billion cubic metres in 2008.

Gas demand is rising quickly in Turkey too. Consumption in 2010 was 39 billion cubic metres, an increase of 9.2 per cent compared with the previous year, and more than double the 17.2 billion cubic metres consumed in 2002. A robust economy and an expanding population mean the strong demand growth is expected to continue in the years to come.

For Europe as a whole, opinion varies on the extent of the projected gas deficit. The unexpected discovery of huge quantities of monetisable shale gas in the US over the past 10 years served as a reminder that predictions are an inexact science. But there is a broad consensus that Europe’s supply/demand deficit will continue to grow. The EU is developing a strategy both to secure additional sources of gas and to diversify its sources of supply.

At the moment, Russia is the dominant supplier of gas to Europe, followed by Algeria. Interruptions to deliveries of Russian gas to Europe in 2006 and 2009 prompted Brussels to throw its weight behind a strategy to ensure that other import options are put in place and to reduce the political risk associated with energy supply. Turkey is crucial to this strategy.

“Turkey is one of the few pathways to get Central Asian oil and gas to Europe without it going through Russia,” says one Washington-based economist.

“Just because it’s an alternative to Russia means that at some point it will become much more of a hub than it is now.”

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Richard Nield is a freelance journalist, photographer and filmmaker covering the Middle East and Africa. In 10 years covering the region, he has been published and broadcast by clients including the BBC, Reuters, Al Jazeera, The Economist, The Financial Times, The Independent and Foreign Policy magazine. He has reported from throughout the region, including Algeria, Egypt, Libya, Morocco, Tunisia, South Sudan, Jordan, Lebanon, Syria, Kuwait and Saudi Arabia.