Address by H.E. Koray Ertaş, Ambassador of Türkiye at the “Energy Security in the Wider Black Sea Region, contributor to the European energy security” (Forecast 2035) Conference

Bükreş Büyükelçiliği 21.11.2014

Bucharest, November 19, 2014

Palace of Parliament (N. Iorga Hall, N. Bălcescu Hall)

Ladies and Gentlemen,

It is my distinct pleasure to be able to share with you the Turkish perspective on the importance of our region in ensuring energy security of Europe. I thank the organizers, notably Mr. Chifu, for gathering important dignitaries from all around the world to discuss important aspects of energy issues, which are so vital for our nations.

The audience here does not need a lecture on the importance of energy in our daily lives. Even a short interruption of energy supplies affecting our households and businesses has a big political, economic, and social price in our modern societies. There is almost no instance of our lives where we do not use energy in one way or other, either for traveling, cooking, heating, cooling, producing, or what have you.

All projections show an increase in the global energy demand in the decades to come. In addition, fossil fuels would continue to be the main energy resource. While fossil fuel consumption rapidly grows in the developed world, their domestic production decreases. As regards to Europe, including Turkey, most nations are already heavily dependent on foreign resources, at levels reaching to almost 100 percent in some cases.

This brings us to the topic of this panel discussion: secure transportation of oil and gas through our region to further west.

Oil and gas are largely transported in tankers or through pipelines. While tankers can run through the open seas, pipelines need to cross territories belonging to other states. That is where the geopolitics often begins, as it is not only the energy needs or economics that determine a pipeline but also the politics of it. Hence, through pipelines run not only oil or gas but politics as well, as we have been vividly seeing during renewed disputes between Russia and Ukraine. As demand for energy surges worldwide, energy security is increasingly associated with foreign policy, national security, economic welfare and global stability. Affordable and uninterrupted flow of energy resources are of significant importance for the development of our countries.

As net energy importers we need to diversify energy supplies through various routes and find new sources for additional hydrocarbon imports. For the suppliers, notably in land-locked locations, like the Caspian basin, secure pipeline transportation is vital. Therefore, secure transit routes are vital not only for consumers but also for producers.

Ladies and gentlemen,

Now allow me to elaborate on what Türkiye, as both a major consumer and a transit country, is doing to contribute to upstream and downstream countries as a secure transit route.

Türkiye has neighbors on its east, south, and north, which are among the major producers of gas and oil. Located in a unique geostrategic area between the EU, Russia, Central Asia and the Middle East, Türkiye stands as a key transit corridor between producers and European consumer markets.

The Caspian area has significant oil and natural gas reserves from both offshore deposits in the Caspian Sea and onshore fields in the basin. Traditionally an oil-producing area, the region's importance as a natural gas producer is growing quickly. The South Caucasus and Central Asia contain about 3 to 4 percent of the world’s oil reserves and 4 to 6 percent of the world’s gas reserves.

Baku-Tbilisi-Ceyhan (BTC) oil pipeline and Baku-Tbilisi-Erzurum (BTE) natural gas pipeline constituted a turning point in shaping the political landscape of the region. These pipelines changed the status quo in the region. The BTE gas line runs alongside the BTC for much of its length. The capacity of the BTC is 1.2 million barrels per day, while that of the BTE is well enough to carry the volumes from Azerbaijan to BOTAŞ main gas pipeline system. The BTC and BTE pipelines play a special role in Turkish – Azeri relations, providing a concrete bridge between the two countries.

Later, the implementation of the Turkey-Greece Interconnector enhanced the EU’s energy supply security by contributing to EU’s efforts to diversify energy sources and routes.

Türkiye has been a staunch supporter of the Southern Gas Corridor which will supply gas from the Greater Caspian basin and the Middle East to European markets. When realized, this would be the fourth hydrocarbon route to Europe and has the backing of the EU.

Trans Anatolian Pipeline (TANAP) project will be the main component of the Corridor. Designed by Türkiye and Azerbaijan, TANAP initially aims to supply to Türkiye 6 bcm of gas from Shah Deniz Phase 2 and transport a further 10 bcm to Europe. The Trans-Adriatic Pipeline (TAP) will carry the Azeri gas to Europe beyond TANAP. The legal framework for TANAP has been set and it is planned that the first gas flow to Türkiye will take place at the end of 2018 following the completion of the construction phase and in 2019 the gas will be delivered to Europe through TAP, connecting with TANAP at the Turkish - Greek border. Once TANAP is commissioned, the newly discovered Azeri gas fields and other Caspian resources, notably the Turkmen gas could also be supplied to Europe via TANAP, thus further contributing to EU energy supply security.

Türkiye-Bulgaria Interconnector is another project currently under review within the Southern Gas Corridor. A Joint Working Group was established to prepare prefeasibility report and action plan. Technical meetings are underway. This will enable both countries to diversify natural gas supply routes and increase resilience against unexpected natural gas crises. Türkiye – Bulgaria interconnector project will pave the way for the delivery of Caspian gas to Bulgaria and beyond. A further connection could be examined on linking the line to the Romanian grid. We believe that such interconnections will play a crucial role for the energy security of South Eastern Europe.

Iraq also offers a great potential for a new natural gas source nation for Europe. According to IEA estimates in 2012, Iraq could provide 20 bcm/y of gas to world markets by 2035. However, political instability in the country makes us to be cautious to say the least, if not pessimistic. We hope that Baghdad and Erbil reach a quick solution on revenue sharing and clear an important hurdle before a great opportunity for energy trade, regional welfare and interdependence.

Finally, the new gas discoveries in the Eastern Mediterranean can either be an opportunity or a liability for the resolution of ongoing conflicts in the region. Hydrocarbon research and exploration activities in Eastern Mediterranean should be handled through an integrated and holistic approach which would cover the entire region. Türkiye could serve as a reliable transit to send volumes to head up to Europe. The gas could be supplied to Europe via Türkiye along the Southern Gas Corridor, using both the domestic and transit transportation systems in Türkiye. We hope that the newly discovered resources would bring peace and prosperity to the region.

To sum up, Türkiye will continue to support transit projects across its territory to contribute to Europe’s energy security as a major reliable transit country for the Caspian and Middle Eastern energy resources. It has the capacity to offer secure transportation in a large volatile region; a vast experience accumulated through years of building and operating various gas and oil pipelines; and most importantly a political vision based on a win-win perspective, rather than zero-sum calculations.

Thank you.