Great potential exists for energy cooperation between Turkey, US
Energy cooperation between Turkey and the U.S. has become an important aspect of bilateral relations for the last 25 years, leading to the completion of significant regional projects – primarily the Southern Gas Corridor and the Baku-Tbilisi-Ceyhan oil pipeline. This decades-long cooperation was one of the major talking points during the Washington meetings on Monday.
Alparslan Bayraktar, deputy minister of energy and natural resources, stated that there is great potential for the natural gas market between Turkey and the U.S., in an address at the 37th Annual Conference on Turkey-U.S. Relations organized by the Turkey-U.S. Business Council (TAİK) and the American Turkish Council (ATC) in the U.S. capital Washington, D.C.
"The two governments should work together and encourage our companies to cooperate with a creative and mutually beneficial business model and support one other," Bayraktar said.
Bayraktar recalled that they initiated structural changes in the energy market 17 years ago, adding they successfully completed all relevant market reforms for both domestic and foreign investors, attracting more than $60 billion to the Turkish markets in the meantime.
Stressing that they continue their energy reforms, especially in the field of natural gas, Bayraktar said they aim to reach 20 billion cubic meters per year in this field. "Gas market dynamics are changing globally. We believe all stakeholders, supplier countries, transporting countries, as well as consuming countries must comply with these changing new market conditions," he continued. "As Europe's fourth-largest gas market, we want to see more flexible and more competitive terms and conditions for our new gas contracts. The market is very sensitive to price dynamics, and suppliers must be aware of this and adapt themselves accordingly."
Bayraktar said that some of the long-term contracts, which account for almost 30% of Turkey's total gas consumption, will end in 2021, pointing to the great potential to cooperate with the U.S. supply in this area. Indicating that the trade volume between Turkey and the U.S. has reached $19 billion, he said energy, especially gas, can play a very important role in raising this volume.
"We have to work together as two governments and encourage our companies to cooperate with a creative and mutually beneficial business model and support one other," Bayraktar continued. "As the dynamics of the global gas market are rapidly changing, we must reassess the other party and carefully analyze the conditions in the gas market."
Bayraktar underlined that they are expanding their natural gas relations, building a new pipeline in two different directions for more gas flow. "It is also important to use Turkey's infrastructure to provide different gas supplies to Turkey and to offer the same gas to different markets. In addition to energy efficiency, we count renewable, smart and new technologies among the new business development opportunities for Turkish and American companies," he further emphasized.
U.S. Deputy Secretary of Energy Dan Brouillette, on the other hand, touched on the existence of long-standing historical relations between Turkey and the United States since the Ottomans. "We believe that a strong and vibrant energy partnership is vital for both countries, and we support efforts to strengthen our collective energy security so the two countries can hold a stronger position against the global challenges they face," he said. "The U.S. is in favor of energy security policies based on fuel and supply diversity in the transparent and competitive European energy market. Therefore, we support the idea that the southern gas corridor project has no chance of success without Turkish engineering, construction and project management processes."
Turkey's LNG imports
from US on rise
Brouillette said that Turkey has purchased approximately 1.89 billion cubic meters of liquefied natural gas (LNG) from the U.S. in the last three years, ranking among the top 10 countries importing LNG from the U.S. and taking the lead among NATO members.
Turkey indeed is one of the largest buyers of U.S. LNG. After becoming the second-largest LNG importer in Europe after Spain in 2017, Turkey became the top European market for U.S. LNG exports in 2018, according to U.S. Department of Energy estimates. Turkey imported 460 million cubic meters of natural gas as LNG from the U.S. in January, greatly surpassing the previous import record made in November 2017 of 196 million cubic meters. Meanwhile, Turkey reduced its share of natural gas imports from Russia in the first month of this year. Its natural gas imports from Russia decreased by 35% in January 2019 compared to the same month last year, which totaled 1.8 billion cubic meters, representing 31.62% of Turkey's total natural gas imports.