Turkey unveils ambitious LNG import plans
Turkish natural gas incumbent BOTAŞ is poised to renew a long-term supply contract for 4 billion cubic metres (Gm³)/year of regasified LNG with Sonatrach, while private Turkish companies might also negotiate a long-term LNG supply contract with the Algerian state-owned company, sources close to the deals told ICIS this week.
Turkish energy companies are also in talks with Qatar for the supply of up 6Gm³/year of long-term LNG, which could also see potential Qatari involvement in a planned terminal on the Gulf of Saros on the Aegean coast.
A BOTAŞ source confirmed that the company had agreed in principle to renew the contract with Sonatrach, which expires in 2014, for another 10 years, but said that a formal sale and purchase agreement had not been signed during talks between Turkish energy minister Taner Yıldız and Algerian oil minister Youcef Yousfi this weekend.
While Sonatrach and BOTAŞ have agreed in principle to renew the contract, a source close to the Turkish government told ICIS that the two sides had yet to agree pricing terms. The two companies are understood to have agreed to index the volumes to crude oil, but are expecting to revise the current arrangement which is indexed to both fuel oil and a basket of crude oil.
Representatives of private Turkish companies also travelled with Yıldız, and have also opened supply talks with Sonatrach to import LNG on a long-term basis. However, no details were made available on how much more LNG could be committed by Sonatrach to Turkish buyers.
The Algerian state company is expected to start commercial operations at its new 4.5m tonne per annum (mtpa) liquefaction train at Skikda in early 2013, with a new 4.7mtpa unit at Arzew scheduled to start production later. However, with the two new trains expected to partly replace ageing liquefaction units, which will be gradually decommissioned, Sonatrach has yet to disclose how much additional LNG supply it could market to buyers.
Turkey turns to Qatar
Turkey's supply push has also extended to Qatar, where Turkish participants are understood to be in talks for both a long-term agreement and shorter-term volumes with Qatari suppliers.
BOTAŞ was understood to have reached an agreement with Qatar for the import of an undisclosed amount of spot LNG, and, in addition to importing several deliveries from Qatari supplier RasGas to the Aliağa terminal, is considering modifying its Marmara terminal to accommodate Qatari Q-Max vessels.
But Yıldız also said Turkey would develop a third import terminal with a capacity of 5-6Gm³/year, possibly at Saros, by the Dardanelles strait, which could be spearheaded by a Turkish-Qatari partnership. The location could serve both Turkey's needs as well as those of Bulgaria and Greece.
Turkish energy officials declined to disclose the counterparties of the prospective terminal, but state-owned energy company Qatar Petroleum (QP), and majority shareholder in the country's LNG supply consortia, RasGas and Qatargas, has long harboured ambitions to secure a foothold in the Mediterranean market. In 2010, QP joined a consortium of companies seeking to develop a 7Gm³/year capacity terminal in western Greece, but the project was shelved after the company disagreed with the other members of the consortium over the technical viability of the terminal (see GLM 22 October 2012).
A further three LNG terminal projects are understood to be in development.
These projects include a site some 23km away from the existing Aliağa terminal, which is being developed as a 6.5mtpa facility. The environmental assessment for this project is due to be completed by June 2013, and could start operations by 2016 if related tenders and applications are successful.
The second terminal could be located at Iskenderun, in the Mediterranean province of Hatay, while the third one could be close to the existing terminal at Marmara.
While Turkey's share of LNG in the country's overall imports dropped by 6.7% year on year to 6.47Gm³/year in 2011, after Japan absorbed large quantities of LNG following the Fukushima nuclear disaster, it has since rebounded strongly. According to ICIS data, the country is on course to import over 20% more LNG in 2012 than in 2011.
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