13 May

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The tender processes and construction works on TANAP Project are in progress and start of the construction of this pipeline is expected in this year. This project has gained importance before its start to operate. By reason of political issues between Ukraine and Russia, countries in the Europe may be faced with a natural gas problem in this year. Therefore, Europe has been looking for a solution or prevention, in the event that the Europe purchases natural gas from Iran, the transmission of this natural gas through TANAP is topical recently.

Importance of the natural gas

In spite of new alternative energy resoources, the natural gas has been keeping its place and share between all energy resources since long years. Not only Turkey, but also many other countries in Europe are natural gas import dependent[i]. According to the statistics, most of natural gas has been imported from Russia. Due to this factor, the political issues between Russia and Ukraine may affect the natural gas supply of Europe in a negative way. Since the natural gas supply may be affected from different factors such as political issues or climate conditions, numerous countries have been working on use and development of other sustainable energy resources such as wind and solar.

TANAP Project at a glance

TANAP Project, one of the biggest pipeline projects in Turkey, negotiations of which have been started in 2011 intends to provide the natural gas from Azerbaijan to Europe through Turkey. After completion of this project, which is expected in 2018, the natural gas supply of Europe and Turkey will be provided to a large extent. Following the first natural gas flow with this pipeline, the transported natural gas amount will be increased each year.

After the natural gas in Israel has been topical in recent years, the option of transport of this natural gas to Europe through TANAP has been brought into question. Accordingly, the natural gas supply of Europe and Turkey may be provided from several countries through this pipeline, in the event that these expectations realize in coming years.

How to provide security of natural gas supply?

As mentioned above, natural gas supply security plays an essential role especially for continuation of the industry which use the natural gas in their market activities and as a conclusion of this, for continuation and increase of competition of the related country in industry with other countries. With regard to natural gas supply security, the importance of natural gas storage comes into question, which has been developed in several countries years ago.

One of the advantages of natural gas is its storability. Especially for above mentioned cases such as supply problems arising from political issues, financial factors or climate, which affect the natural gas supply, the storage of natural gas contributes to security of its supply.

As is known, the natural gas storage activities have been supported in Turkey with laws and regulations under certain conditions. Pursuant to an amendment on the Council of Ministers’ Decision of 2012 (“Decision”), the natural gas storage investments over a certain amount have been regulated as privileged investments under the conditions of the Decision. Accordingly, natural gas storage projects will benefit from financial incentives under these conditions.

Natural gas storage as a market activity may be implemented under the condition of obtaining the related license. Moreover, natural gas storage license applications have also the priority to license applications in the electricity and oil markets.

In conclusion, the supply security of natural gas is very essential as well as its supply or import in order to avoid problems in energy supply. In this regard, the increase of natural gas pipeline projects’ number and of the natural gas storage capacity has become important for natural gas import dependent countries.

 


Herdem Law Firm, Istanbul Turkey

 

[i] According to the statistics, natural gas has been used by the production of 43,5 % of the electricity in Turkey. http://enerjienstitusu.com/turkiye-kurulu-elektrik-enerji-gucu-mw/.

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