IEA Turkey 2015 Report
IEA Turkey 2015 Report
full report
Overview
Turkey is an increasingly important transit hub for oil and natural gas supplies as they move from Central Asia, Russia,
and the Middle East to Europe and other Atlantic markets.
Turkey is well placed to serve as a hub for oil and natural gas supply headed to Europe and
other Atlantic markets from Russia, the Caspian region, and the Middle East (Figure 1).
Turkey has been a major transit point for oil and is becoming more important as a transit
point for natural gas. Growing volumes of Caspian oil are being sent to Black Sea ports such
as Novorossisyk, Russia and Supsa, Georgia and then to Western markets by tanker via the
Turkish Straits (Bosporus and Dardanelles waterways). Caspian oil and oil from northern Iraq
also cross Turkey by pipeline, through the Ceyhan oil terminal on Turkey's Mediterranean
coast.
Turkey is primed to become a significant natural gas pipeline hub. However, currently most
of its natural gas pipeline connections only bring natural gas into the country, as growing
demands have left little natural gas for export. Since 2010, Turkey has experienced some of
the fastest growth in total energy demand among countries in the Organization for Economic
Cooperation and Development (OECD). Unlike several other OECD countries in Europe,
Turkey's economy has avoided the prolonged stagnation that has characterized much of the
continent for the past several years.
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Turkey's production of liquid fuels has increased since 2004, it is much less than what the
country consumes each year (Figure 2).
Sector organization
Trkiye Petrolleri Anonim Ortakl (TPAO) is the dominant exploration and production entity
in Turkey. As a state-owned firm, TPAO has preferential rights in petroleum exploration and
production, and any foreign involvement in upstream activities is limited to joint ventures with
TPAO. In 2013, TPAO produced 34,000 b/d of crude oil accounting for 73% of the total crude
oil production in Turkey.2
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Pipelines
Turkey currently has two crude oil import pipelines (Table 1),7 the Baku-Tbilisi-Ceyhan (BTC)
pipeline from Azerbaijan and a pipeline from northern Iraq to Ceyhan, Turkey. The Iraq
pipeline has two branches. The original line of the Iraq pipeline stretches from the IraqTurkey border to Kirkuk, Iraq. However, little oil has flowed on this part of the pipeline since
the Islamic State of Iraq and Syria (ISIS) began seizing territory in the area in early 2014 and
the pipeline was sabotaged. The BTC pipeline has also been targeted in the past. In August
2008, an explosion in eastern Turkey shutdown the BTC pipeline for more than two weeks.
The explosion was reportedly either coordinated with a cyber attack on the pipeline's
computer systems or was caused by the cyber attack.8
In 2013, the Kurdish Regional Government (KRG) completed construction of a second line of
the Iraq pipeline, beginning at Taq Taq field near Erbil in the KRG controlled portion of
northern Iraq, which joins the existing pipeline to Ceyhan, Turkey near the Iraq-Turkey
border. Initial flows on the KRG line were low, as the Iraqi central government objected to the
KRG selling oil without central government approval or involvement. The two sides reached
an agreement, and in January 2015, the KRG began exporting its volumes as well as the
central government controlled oil that was produced in northern Iraq. The agreement calls for
exports of 250,000 b/d of crude from KRG controlled territory and 300,000 b/d from central
government controlled fields around Kirkuk, Iraq, all of which is to be marketed by Iraq's
State Oil Marketing Organisation.9 Actual oil exports have varied from month-to-month, but in
May 2015, exports to Ceyhan, Turkey via the KRG line exceeded 550,000 b/d, including
about 400,000 b/d of crude from KRG controlled fields.10
Status
operating
operating
Capacity
(million b/d)
1.2
1.5
Azerbaijan and
Kazakhstan
620 northern Iraq
Destination
Ceyhan oil port
Details
started operations
in 2006
Sources: U.S. Energy Information Administration based on BP, OilPrice.com, The National (UAE), The Washington Post, Genel Energy, Eni, and United Press
International.
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Facility
Status
Capacity
(million b/d)
Kurdish Regional
Government
(KRG) Pipeline
operating
0.6
Samsun-Ceyhan
canceled
up to 1.5
Destination
Details
started operations in
1976; annual
throughput is much
lower than the
design capacity, as
the pipeline is
frequently
sabotaged
completed in 2013
Sources: U.S. Energy Information Administration based on BP, OilPrice.com, The National (UAE), The Washington Post, Genel Energy, Eni, and United Press
International.
Ports
The port of Ceyhan has become an important outlet for both Caspian oil exports as well as
oil shipments from northern Iraq. In addition to the two crude oil pipelines that terminate in
Ceyhan, Turkey (BTC and Iraq-Turkey), crude and condensate are also trucked in from
northern Iraq. In 2014, the port of Ceyhan handled more than 650,000 b/d of Caspian crude
oil exports and more than 130,000 b/d of Iraqi crude oil exports, most of which were destined
for Europe.11
Refinery sector
As of January 1, 2015, Turkey had six refineries with a combined processing capacity of
663,000 b/d, according to OGJ.12 Tpra is Turkey's dominant refining firm and operates four
refineries accounting for 85% of the total refining capacity. Tpra also owns about 59% of
the total petroleum products storage capacity in Turkey.13 Tpra was formerly state-owned,
but has been 51% owned by the Koc-Shell Joint Venture Group since 2005, with 49% of
shares publicly traded.
Natural gas
Turkey has a strategic role in natural gas transit because of its position between the world's second-largest natural gas
market, continental Europe, and the substantial natural gas reserves of the Caspian Basin and the Middle East.
As of January 1, 2015, the OGJ estimates Turkish natural gas reserves at 218 billion cubic
feet (Bcf).14 Turkey produces only a small amount of natural gas, with the total production
amounting to 19 Bcf in 2013 (Figure 4). With 11 Bcf in 2013, TPAO accounted for most of
Turkey's natural gas production.15
Turkey is an important consumer of natural gas and is becoming an important transit state for
natural gas. Turkey is one of the few countries in Europe where natural gas consumption
continues to show strong growth. Turkey's growing consumption has helped spur
development of multiple pipelines to bring natural gas into the country, and while it has left
little natural gas available for export, new supplies have been contracted and new pipelines
are under construction that will increase both Turkey's imports and exports of natural gas.
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Sector organization
The state-owned Petroleum Pipeline Corporation (BOTA) dominates the natural gas sector,
although most of the market is open to competition. BOTA is vertically integrated across
much of the natural gas sector. BOTA accounts for about 80% of natural gas imports; it
builds and operates natural gas pipelines in Turkey; it accounts for most of the wholesale
market; and it accounts for most exports of natural gas.
Turkey began liberalizing its natural gas market in 2001 with the Natural Gas Market Law,
which required that BOTA be legally unbundledbroken up into separate legal entities for
natural gas transport, operating liquefied natural gas (LNG) terminals and storage facilities,
and trading and marketing. Several draft and enacted laws since 2001 have also required
BOTA to be unbundled, including most recently, a draft bill submitted to parliament in 2014.
Timelines for completing the unbundling have not been binding and have repeatedly been
extended.
Another goal of market liberalization has been to reduce the dominance of BOTA in the
market segments in which it operates to foster competitive markets. BOTA is required to
reduce its share of imports to no more than 20% of annual consumption by gradually selling
off its import contracts.16 There has been progress in BOTA selling off its import contracts:
BOTA has transferred 350 Bcf of import contracts, equal to about 20% of Turkish natural
gas consumption, to seven private companies.17 Russia's state-owned natural gas company,
Gazprom, has a 71% stake in Bosphorus Gaz (which holds import contracts for 26 Bcf per
year and 62 Bcf per year; about 5% of Turkish consumption), and Gazprom has filed an
application with Turkey's antimonopoly regulator to buy a controlling interest in Akfel Gaz
(contracts for 79 Bcf; about 4.5% of Turkish gas consumption).18
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Additionally, Turkey has little natural gas storage capacity and primarily relies on increased
imports to meet the seasonal increase in demand. Natural gas shortages are not uncommon
in winter, as the pipeline capacity is insufficient to meet peak winter demands.
Natural gas consumption in Turkey and exports from Turkey are also highly vulnerable to
supply disruptions. Natural gas imports to Turkey have frequently been reduced or
temporarily suspended because of insurgent attacks on import pipelines or because of cold
weather in countries that export to Turkey. These disruptions can be mitigated by other
suppliers if there is spare pipeline capacity. Russia, in particular, has on multiple occasions
sent extra natural gas to Turkey when needed.
Storage
Companies importing natural gas into Turkey are required to hold rights to storage capacity
equal to 10% of their annual imports. However, Turkey currently has one operating
underground storage facility (Table 2)22 with total storage capacity of about 5% of Turkey's
imports of natural gas. For comparison, the 28 countries of the European Union (EU)
collectively have storage capacity equal to a little less than 20% of total annual
consumption.23 If all the storage capacity currently proposed in Turkey is realized, capacity
will amount to about 20% of annual imports for domestic consumption.
Facility
Kuzey
Marmara
Marmara
Eregesli
LNG
Aliaga LNG
Tuz Golu
Tarsus
province
Status
operating
Operator
TPAO
operating
BOTA
operating
planned
planned
EgeGaz
BOTA
Bendis
Energy
Working
gas
capacity
(Bcf)
Details
90
Pipelines
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At the end of 2013, BOTA had more than 7,600 miles of natural gas pipelines in Turkey,
including interconnections to four international import pipelines and one international export
pipeline (Table 3).24 With several pipelines under construction or scheduled to begin
construction in 2015 and 2016, Turkey is expanding its pipeline system to better
accommodate growing domestic natural gas consumption as well as to transit more natural
gas to European consumers.
International and regional politics play a role in any pipeline that crosses borders, but politics
is particularly critical in realizing pipelines proposed to transit Turkey. Russia-Ukraine
relations and Russia-EU relations have both had a prominent role in Gazprom's planned
Turkish stream pipeline. Relations between Turkey the Kurdish Regional Government and
the Iraqi central government will likely affect plans to build a pipeline from northern Iraq to
Turkey. Additionally, insurgents in Turkey and in neighboring countries have, on several
occasions, attacked natural gas pipelines.
Status
operating
Capacity (Tcf)
0.5
Russia
Markets
Southeast Europe
and Turkey
TabrizDogubayazit
Blue stream
operating
0.5
1,600
Iran
Turkey
operating
0.6
750
Russia
Turkey
South Caucuses
Pipeline (SCP)
operating
0.3
430
Azerbaijan
Interconnector
Turkey-GreeceItaly
operating (TurkeyGreece)
0.4
180
Azerbaijan, Russia,
and Iran
Greece
operating
(to Syria)
0.4
630
Egypt
Jordan, Lebanon,
and Syria
South Caucasus
Pipeline
(expansion)
Trans-Anatolian
Pipeline (TANAP)
construction to start
in 2015
0.6
430
Azerbaijan
construction
0.6
1,150
Azerbaijan
Georgia, Turkey,
and southeast
Europe
Turkey and Europe
Details
first deliveries to
Turkey in 1987;
transits Ukraine,
Moldova,
Romania, and
Bulgaria
started operations in
2001
started operations in
2003
first deliveries to
Turkey in 2007;
follows the route of
the BTC oil pipeline
from Azerbaijan,
through Georgia,
and connects to
Turkey's domestic
transmission
pipeline system
Turkey-Greece
interconnector
started operations in
2007; there has
been little progress
on extending the
line through Greece
and to Italy
started operations in
2003; an extension
to allow deliveries to
Turkey and Europe
had been planned;
annual throughput is
much lower than the
design capacity, as
the pipeline is
frequently
sabotaged
expected to start
operations in 2019
expected to start
operations in 2019;
will receive natural
gas from the SCP
expansion at
Turkey's border with
Georgia and deliver
natural gas to
Turkey's borders
Sources: U.S. Energy Information Administration based on Gazprom, GazpromExport, Natural Gas Europe, BP, Edison, Arab Republic of Egypt, Ministry of
Petroleum, Reuters, Trans Adriatic Pipeline, Platt's International Gas Report, Nefte Compass, and Eastring.
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Facility
Status
Capacity (Tcf)
Markets
Trans Adriatic
Pipeline (TAP)
construction to
begin in 2016
0.4
540
Azerbaijan via
TANAP and SCP
planning
0.6
more than
500
Russia
Turkey
planning
1.7
more than
500
Russia
Southeast Europe
via Turkey
Iraq-Turkey
proposed
0.4 - 0.7
--
northern Iraq
Turkey and
southeast Europe
Interconnector
Turkey-Bulgaria
(ITB)
proposed
0.1
--
Azerbaijan
Bulgaria
Eastring
proposed
up to
1.4
more than
500
South stream
canceled
2.2
560
(offshore)
Russia
Turkey and
southeast Europe
Details
with Bulgaria and
Greece; follows the
route of Turkey's
existing domestic
transmission
pipeline system
expected to start
operations by 2020;
expandable to 0.7
Tcf; built mainly to
carry natural gas
from Azerbaijan via
the SCP expansion
and TANAP, but
could carry natural
gas from Russia or
any other source
transiting Turkey
announced
completion by end
of 2016
by 2019; will follow
much of the planned
route for South
stream but will make
landfall near Kiyikoy,
Turkey rather than
in Bulgaria
Turkey continues to
negotiate with the
Kurdish Regional
government and the
Iraqi government;
while no agreement
has been reached,
BOTAS has begun
extending the
domestic natural
gas transmission
system to the Iraqi
border
would allow Bulgaria
to implement a
supply contract it
signed with
Azerbaijan in 2013
would be open
access, per EU
regulations; would
run from eastern
Slovakia, across
Hungary and
Romania,
connecting to an
upgraded Trans
Balkan line in
Romania or Bulgaria
canceled in late
2014 and replaced
with Turkish stream
Sources: U.S. Energy Information Administration based on Gazprom, GazpromExport, Natural Gas Europe, BP, Edison, Arab Republic of Egypt, Ministry of
Petroleum, Reuters, Trans Adriatic Pipeline, Platt's International Gas Report, Nefte Compass, and Eastring.
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capacity of 280 Bcf. The Aliaga terminal is owned by EgeGaz, and has an annual capacity of
210 Bcf of natural gas.26
Although Turkey is encouraging natural gas transit across Turkey via pipelines, it is
discouraging LNG transit. Ukraine, Romania, and Bulgaria have all, at one time or another,
proposed building LNG import facilities on their Black Sea coasts. However, the only way for
an LNG tanker to reach such a facility would be through the Turkish Straits, and Turkish
authorities have indicated that they would not allow LNG vessels to transit the straits for
safety reasons. Additionally, the straits are already a major shipping chokepoint, especially
for cargo classified as hazardous (which includes LNG as well as crude oil and other
petroleum liquids).
Coal
Coal, particularly lignite, is Turkey's most abundant indigenous energy resource and is an important fuel for electricity
generation.
In 2012, coal production accounted for 47% of Turkey's total primary energy production on a
Btu basis. Most of Turkey's coal reserves are lignite reserves with about 300-500 million tons
of hard coal reserves.27 Turkey's lignite reserves tend to be low quality reserves with a low
heat content,28 and estimates of lignite reserves tend to be either about 2,000 million tons or
about 10,000 million tons depending on the methodology used.29 In 2012, Turkey produced
77 million short tons (MMst) of total coal, 95% of which was lignite. Turkey also imported 32
MMst of coal in 2012, most of which was hard coal.
Coal-fired power stations are an important source for Turkey's electricity generation, and
there is renewed interest in exploiting Turkey's domestic coal resources. Coal-fired
generation accounted for 28% of total electricity production in Turkey in 2012, including 17%
from lignite and 11% from hard coal.30 Turkey has several new coal plants under
construction and more plants proposed.
Electricity
Following the restructuring of Turkey's electricity sector, both consumption and generation of electricity have expanded.
Most electricity is generated using fossil fuel sources, although the government plans to displace at least some of this
generation with nuclear power.
In 2012, Turkey's total electricity generating capacity was 57 million kilowatts, and total net
electricity generation was 228 billion kilowatthours. Turkey's electricity consumption more
than doubled between 2001 to 2012. Because of the economic slowdown, consumption
declined by about 3% in 2009 compared with the previous year. Since then consumption has
grown by 5% to 10% per year, accounting for much of the total growth since 2001.
Most of Turkey's electricity generation comes from fossil fuel-fired power plants (72% of total
generation in 2012) with natural gas accounting for more than half of all fossil fuel-fired
generation. Electricity from hydroelectric facilities also accounts for a significant share of
Turkey's total generation (25%). Although Turkey does not currently generate any electricity
from nuclear power, the government has been advocating construction of nuclear power
plants to diversify Turkey's electricity supply portfolio.
Sector organization
The state-owned and vertically integrated Turkish Electricity Authority controlled generation,
transmission, and distribution of electricity in Turkey prior to the electric sector reforms that
began in the 1980s. Since then, the government has passed several laws which have
unbundled and partially privatized the Turkish electric sector.
The state-owned Electricity Generation Company (EUAS) remains the largest electric
generation company in Turkey controlling about 40% of all generation capacity in Turkey.31
The remaining generation comes from independent power producers and firms given special
state concessions to build and operate power plants. The wholesale electricity market in
Turkey is also open to private companies; however it is dominated by the state-owned
Turkish Electricity Trading and Contracting company (TETAS).
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Transmission and distribution services are separate (unbundled) from generation and
marketing services. The Turkish Electricity Transmission Company, a state-owned
enterprise, owns and operates the transmission system. There are 21 electric distribution
regions in Turkey, most of which are operated by private companies.
Nuclear
Turkey plans to build nuclear power plants at three sites: Akkuyu, on the Mediterranean
coast; Sinop, on the Black Sea coast; and a third yet-to-be-decided location. The formal
ground-breaking ceremony marking the official start of construction at Akkuyu took place in
April 2015. In accordance with an agreement signed by Turkey and Russia in 2010,
Rosatom, Russia's state nuclear company, will build, own, and operate the Akkuyu plant. The
Turkish state electric generation company, EUAS, is expected to take a stake in the power
plant. The plant will have four units with a total capacity of 4.8 gigawatts, and the first unit is
expected to begin operating about 2020.
Construction at Sinop for Turkey's second nuclear power plant is planned to start in 2017.
The Sinop plant will be built by a Japanese and French consortium and operated by GdF
Suez. EUAS is also expected to take a stake in the power plant. The Sinop plant will have
four units with a total capacity of 4.6 gigawatts, with the first unit expected to begin operating
in 2023.
Since November 2014, Turkey has been in exclusive negotiations with the State Nuclear
Power Technology Corporation of China to build a third nuclear power plant in Turkey using
reactors from U.S. firm Westinghouse. The location of the third plant has not been decided,
and construction is not expected to begin until 2019 at the earliest.32
Notes
Data presented in the text are the most recent available as of July 7, 2015.
Data are EIA estimates unless otherwise noted.
Endnotes
1
Oil & Gas Journal, "Worldwide Look at Reserves and Production," (December 1, 2014) p. 32.
Trkiye Petrolleri Anonim Ortakl, Basic Activities: Production, accessed June 9, 2015.
International Energy Agency (IEA), Monthly Oil Data Service, accessed June 10, 2015.
BP, Baku-Tbilisi-Ceyhan pipeline, accessed June 4, 2015; Jenkins, Gareth, "Debts and Doubts Delay Kirkuk-Ceyhan Oil Pipeline Renewal," OilPrice.com
(March 30, 2010); McAuley, Anthony, "Kurdistan Regional Government breaks monthly oil export record," The National (June 4, 2015); Swint, Brian, "New
oil pipeline boosts Iraqi Kurdistan, the region made of three northern provinces," The Washington Post (June 13, 2014); Genel Energy, Operations - Kurdistan
Region, accessed June 4, 2015; Eni, Samsun-Ceyhan (TAP) Oil Pipeline Project, accessed June 4, 2015; and United Press International, Turkey's SamsunCeyhan oil pipeline shelved (April 23, 2013), accessed June 4, 2015.
8
Robertson, Jordan and Michael Riley, "Mysterious '08 Turkey Pipeline Blast Opened New Cyberwar," Bloomberg, (December 10, 2014) accessed June 12,
2015.
9
Genel Energy, Trading and operations update, (January 21, 2015), accessed June 12, 2015.
10
McAuley, Anthony, "Kurdistan Regional Government breaks monthly oil export record," The National (June 4, 2015).
11
Lloyd's List Intelligence, APEX tanker data, accessed June 12, 2015.
12
13
14
Oil & Gas Journal, "Worldwide Look at Reserves and Production," (December 1, 2014) p. 32.
15
Trkiye Petrolleri Anonim Ortakl, Basic Activities: Production, accessed June 9, 2015.
16
IEA, Oil & Gas Security, Emergency Response of IEA Countries, Turkey (2013), p. 15.
17
IEA, Oil & Gas Security, Emergency Response of IEA Countries, Turkey (2013), p. 15.
18
Sokolov, Vitaly and Michael Ritchie, "Turkstream Takes Shape as Moscow Buries South Stream," Nefte Compass, vol. 24, No. 2 (January 15, 2015), p. 2.
19
IEA, Monthly Gas Data Service, accessed June 10, 2015 (subscription required).
20
Cedigaz, Natural Gas Statistical Database, accessed June 8, 2015 (subscription required).
21
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22
O'Byrne, David, "Turkey licenses two new underground gas storage projects," Platt's (April 14, 2014) accessed June 11, 2015 and IEA, Oil & Gas Security,
Emergency Response of IEA Countries, Turkey (2013), pp. 17-18.
23
Gas Infrastructure Europe reports EU storage capacity of 91,164 million cubic meters (3,219 Bcf) as of June 10, 2015 versus EIA reported consumption for
2014 of 17,060 Bcf.
24
Gazprom, Gas pipelines; GazpromExport, Turkey, Transportation, and Projects; Natural Gas Europe, Turkey's Role as a Mega Energy Hub (December 22,
2014), accessed June 8, 2015; BP, South Caucasus pipeline, accessed June 8, 2015; Edison, ITGI Pipeline, accessed June 8, 2015; Arab Republic of Egypt,
Ministry of Petroleum, Arab Gas Pipeline, accessed June 8, 2015; Antidze, Margarita, "BP sees TANAP gas pipeline project deal within two months," Reuters
(March 25, 2015) accessed June 8, 2015; and Trans Adriatic Pipeline, TAP at a glance, accessed June 8, 2015; Nefte Compass, "Bulgaria to Map Possible
Turkish Gas Line," Vol. 24, No. 15 (April 16, 2015), p. 9; O'Byrne, David, "Turkey plans for Iraq link," Platt's International Gas Report, Issue 757 (September
22, 2014), pp. 23-24; and Eastring, Capacity & Construction, accessed June 10, 2015.
25
Cedigaz, Natural Gas Statistical Database, accessed June 8, 2015 (subscription required).
26
IEA, Oil & Gas Security, Emergency Response of IEA Countries, Turkey (2013), p. 16.
27
According to BP Statistical Review of World Energy 2014 Turkey had 322 million tonnes of Anthracite and bituminous proved coal reserves at the end of
2013; according to Federal Institute for Geosciences and Natural Resources (BGR), Energy Study 2014, (December 2014), p. 90, Turkey had 384 million tons
of hard coal reserves at the end of 2013; and according to European Association for Coal and Lignite, Country Profiles: Turkey, accessed June 2, 2015,
Turkey had 512 million tonnes hard coal proved reserves at the end of 2012.
28
European Association for Coal and Lignite, Country Profiles: Turkey, accessed June 2, 2015.
29
According to BP Statistical Review of World Energy 2013 Turkey had 1,814 million tonnes of proved lignite reserves at the end of 2012; According to BP
Statistical Review of World Energy 2014 Turkey had 8,380 million tonnes of proved lignite reserves at the end of 2013; according to Federal Institute for
Geosciences and Natural Resources (BGR), Energy Study 2014, (December 2014), p. 98, Turkey had 2,055 million tons of lignite reserves at the end of 2013;
and according to European Association for Coal and Lignite, Country Profiles: Turkey, accessed June 2, 2015, Turkey had 13,442 million tonnes hard coal
proved reserves at the end of 2012.
30
European Association for Coal and Lignite, The role of coal in EU Power generation (2012), accessed June 2, 2015.
31
32
World Nuclear Association, Country Profiles, Nuclear Power in Turkey, accessed June 6, 2015.
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