Turkey's BOTAS abandons fourth Marmara LNG tank

17 August 2016 12:57 Source:ICIS
Storage to benefit from trade shifts

Turkey’s BOTAS has scrapped plans to build a fourth storage tank at its Marmara LNG terminal, a company source told ICIS on Wednesday.

The state-owned company was planning to build a fourth tank at the island terminal near Istanbul that would have had an estimated 160,000 cubic metre (cbm) capacity, larger than the existing three which have a capacity of 85,000cbm each. A deadline for contractors to bid to build the new storage unit ended 16 August.

The source could not explain why the fourth tank had been scrapped.

He added the company will, however, scale-up its domestic grid upgrade plans. Contractor tenders for these will be held before the end of the year.

As the transmission system operator and natural gas incumbent, BOTAS has been taking on a flurry of activities ranging from pipeline upgrades to signing of new pipeline and LNG contracts. It was also expected to take over the country’s storage operations from Turkish Petroleum (TP), a state-owned company in charge of upstream exploration.

Last week, Turkey indicated its intention to resurrect at least one string of TurkStream, a pipeline which will carry Russian gas to Turkey. This would mean that BOTAS could join Russia’s Gazprom in the construction of the pipeline, putting additional strain on its finances.

It would also mean it would need to develop local grid infrastructure around the beaching point of TurkStream, north of Istanbul, and that other projects to improve supply security could be side-lined.

LNG trade ramp-up

BOTAS is in the process of expanding its LNG activities, having reportedly booked capacity on the country’s first floating storage and regasification unit (FSRU) which is likely to be brought into Turkey’s western Aegean coast near Aliaga in the first part of 2017.

The incumbent has also hinted at the possibility of bringing in a second FSRU in the longer-term.

“The government is keen to expand the facility for security of supply reasons, but also to improve our LNG trading opportunities,” a source active in the market told ICIS at the end of June.

Turkey’s spot LNG imports surged to a six-year high in 2015, as the country purchased 2.5 billion cubic metres of LNG from Belgium, France, Spain, Qatar, Nigeria, Norway and Trinidad and Tobago, according to the latest data by the regulator EPDK. aura.sabadus@icis.com

By Aura Sabadus