Perspectives of Regional Energy Cooperation: Turkish Sight (Перспективы регионального энергетического сотрудничества: взгляд Турции)

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Ахмет Кемаль Дордунчу, Президент энергетической рабочей группы TUSIAD, СЕО Sabanзi Holding, Турция 

Dear Ministers, Distinguished Guests, Ladies and Gentlemen,

It is a great privilege for me to participate in the 3rd KazEnergy Eurasian Energy Forum as the President of the Energy Working Group of Turkish Industrialists’ and Businessmen’s Association (TÜSİAD). I would like to thank the organizers of this event for giving me the opportunity to convey the views of TÜSİAD Energy Working Group on the wide-range possibilities of energy cooperation in the Eurasian region, an emerging region with a growing geostrategical importance.

First of all let me give you a brief overview on the activities of TÜSİAD Energy Working Group. With its 50 active members, the Energy Working Group incorporates the presidents of consumers, producers and distributors of various companies and NGOs of petroleum, natural gas, electricity, bio-ethanol, wind power and hydroelectric power. The Working Group, including members with such diverse interests, considers the security of energy supply to be the most imminent issue to be surmounted in short term in Turkey.

Hence, we cooperate with the Turkish government to assess alternative energy policies and to determine precautionary actions to prevent an energy gap in the near future. We regularly submit the private sector’s views on the energy market and make policy suggestions on the initiated deregulation and liberalization processes to improve the investment climate in the country. As we wish to contribute to the restructuring of the sector, we also work to raise public awareness in the energy related issues such as increasing energy efficiency, alternative energy potentials of  Turkey.
Ladies and Gentlemen,

The Eurasian Region is becoming an  emerging and vital part of the world in the changing global balances. The economic and political landscape of Eurasia is rapidly changing. The countries of our Region are positioned very strategically at the crossroads of East and West and they present high potential of growth with their unsaturated and complementary markets especially in certain sectors like energy and transport.
Energy sector is a key area of cooperation in the new landscape of the 21st century within which the world’s economic regions are interdependent for ensuring energy security and stable economic conditions. Acquiring sustainable, competitive and secure energy is indispensable where world energy consumption is expected to rise by 60% in the next 25 years.

Turkey faces a more grave concern as the country is currently 72% dependent on imports for energy products. This ratio is expected to rise to 80% by the year 2020. Therefore, establishing the security of supply is one of main concerns for our country. In doing so, one of the main goals for us and the other energy exporting countries is the diversification of supply. As an energy hub and transport corridor, the Region offers undeniable opportunities to the Western markets, as well as to Eastern Asia, anxious to avoid dependence on Middle Eastern oil and Russian natural gas.

A similar concern is valid for the energy exporting countries, as diversification of the route of transmission is as vital for them to secure their interests. As import dependency is a concern for us, route dependency is a concern for the Caspian Sea region.

73% of the crude oil and 72% of the proven natural gas reserves of the world lie in the Caspian Sea, Middle Eastern regions and Russia, surrounding Turkey. As a reliable, strategic, historic and cultural partner of the Eurasian region, Turkey is an ideal candidate to become an energy corridor for the transmission of energy resources.

There are specific initiatives designed to carry the Caspian Sea region oil and natural gas. South European Gas Ring and the Nabucco Project serve as viable alternatives to carry natural gas from the Caspian Sea region to the buyers in Europe. The deepening of energy ties between us will contribute to financial, economic and political stability of the Caspian Sea  region.

Turkey has already taken certain initiatives in that direction with both Azerbaijan and Russia with the four transmission projects already completed:
    Baku-Tblisi-Ceyhan Crude Oil Pipeline (From the Caspian Sea Region coast of Azerbaijan via Georgia to the Mediterranean Port of Ceyhan in Turkey)
    Blue Stream Natural Gas Pipeline (From Russia passing below the Black Sea and reaching Durusu terminal, some 60 km from the port of Samsun in Turkey)
    Baku-Tblisi-Erzurum Natural Gas Pipeline (From the Caspian Sea region coast of Azerbaijan via georgia to the eastern province of Erzurum in Turkey)
    Russian West Natural Gas Pipeline (Running from Russia via Ukraine, Moldova, Romania and Bulgaria to reach Thrace Region of Turkey to be further distributed in the country)

These projects allow Turkey to work with other Caspian Sea region  partners. For example, in the very near future, hopefully it will be possible to ship Kazakh oil through Caspian Sea to Baku and from thereon to Turkey via the Baku-Tblisi-Ceyhan Crude Oil Pipeline. The two planned projects Nabucco and South European Gas Ring could revitalize the East-West Energy Corridor, serving to the same end.

Moreoever, it can be helpful to attract your interest to the volume of Turkish energy market. Turkey is one of the fastest growing countries which results in increase in energy demand. Turkey, whose national gas demand was 35 bcm in 2007 and is projected to reach 66 bcm in 2020, has an important potential to act as an export outlet for Caspian Sea region energy resources for both its own consumption and Europe’s demand. The similar growing pattern is also available for electricity which is 192 Twh in 2007 and will reach to 475 Twh in 2020 according to official projections. All these figures make Turkey is one of the largest energy consumption markets in Europe. Although Turkey is in position of bridging Caspian Sea region sources to Europe, Turkish internal market largeness is an advantage to create a customer consumption base of Caspian Sea region energy sources. In addition to aferomentioned pipeline projects, Trans Adriatic Pipeline (from Greece to Italy via Albania) and Turkey-Greece-Italy interconnectoor will be the favourable outlets whose shorter distance will make Caspian Sea region closer to Southeast Europe. Possible West Balkans Pipeline (from Greece to Slovenia) will add to diversification of the transmission routes.

Further to these, it should be emphasized that Turkey is trying to become one of the important energy trade terminals by means of new greefield development projects in Ceyhan region in where Baku-Tbilisi-Ceyhan pipeline ends. Although becoming succesful on creating a trading zone is dependent on developments on new pipeline projects, there is a high potential to build new LNG terminal and refinery projects in Ceyhan. ..

As a summary, it can be say that Turkey is a very important country in energy arena because of his internal consumption, closeness to both demand and sourcing sides, different greenfield project opportunities and his political consistency & integrity which provide reliability on supply security.

This situation inevitably brings us to think on the role that private sector can play for increasing trade and investment relations of the regions’ countries and on the institutional ties that can be built to boost the relations between the businesmen of the region, especially with our Kazak partners.

Within this context, as one of the leading NGOs of Turkey, TÜSİAD believes that both Turkey and the Eurasian region have mutual interests from  cooperation in the energy field. The business opportunities to be created by energy-related interactions will surely contribute to the increase of welfare in the countries of the Region. The common oil and gas projects with the mere creation of an alternative route could give the Caspian Sea region the leverage it needs in its negotiations and can help create a more competitive energy market.

The common challenge today is to guarantee affordable, secure and uninterrupted flow of hydrocarbon resources. I believe at this point we have to reemphasize that the Caspian Sea  region has to also show its determination for the realization of such projects in the political realm if the aim is to diversify the supply sources and the supply routes of gas. Turkish business community gives its full support to such initiatives, recently called “the peace project” by our Energy Minister. TÜSİAD is ready to be a platform of cooperation in the name of the Turkish business community and welcomes all projects that contribute to the welfare of the Region. We hope that this will mark a new era for the strengthening of cooperation between Turkey and the Caspian Sea Region.

Thank you very much for your attention. With this occasion, I would like to thank once more to KazEnergy for the organization of this conference. I hope that we will continue our cooperation in the future.