Turkey will start natural gas production from its largest Black Sea field on Thursday, giving President Recep Tayyip Erdogan a chance to lower consumer energy prices less than a month before elections.
The Sakarya field will supply 10 million cubic meters per day in its first phase, peaking at 40 million cubic meters in 2027-28 in the second stage, state producer Turkish Petroleum AO said.
That would be enough to cover about a quarter of Turkey’s current consumption of 53 billion cubic meters per year, providing a nice dent in the $97 billion annual energy import bill that is driving a deficit of current account growing.
Erdogan faces the toughest election of his 20 years in power on May 14, when he will face an opposition united against his handling of the economy under an increasingly authoritarian government. The country has struggled with inflation of up to 85% over the past year, although it fell to around 50% last month.
Energy Minister Fatih Donmez has previously said gas will be produced cheaper than imports, and pro-government newspaper Yeni Safak said Erdogan will use the opening to announce discounted or even free gas to some users .
Political promises
TP hopes to export some of the gas to markets including Europe, President Melih Han Bilgin told reporters during a visit to the Zonguldak processing facility on the southern Black Sea coast. But it would have to balance the financial incentive for overseas sales with Erdogan’s political promises to use gas to lower bills at home.
Those commitments are clear at the site, where the storage tanks are labeled “We Promised It,” a reference to Erdogan’s commitment to developing national expertise to carry out the project. Engineers are challenged to extract gas more than 2 kilometers (1.24 miles) below sea level and 165 kilometers from the coast.
It is still unclear how much Turkey could export, but it already has pipeline connections with neighboring Bulgaria and Greece that could send gas to Europe. If the coming winter is cold, the continent could face fuel shortages and increase demand for non-Russian supplies.
Russia cut most pipeline gas flows to the European Union as a result of the country’s invasion of Ukraine. However, Turkey has expanded cooperation with Russia. The two nations plan to turn western Turkey into a regional hub for gas trade and transit.
Turkish Petroleum, which developed the Sakarya field with Schlumberger NV and Subsea 7 SA, says the field has 710 billion cubic meters of recoverable reserves.
If successful in the Black Sea, TP hopes to export its new upstream expertise elsewhere. It has already partnered with Algeria’s Sonatrach to search for oil and gas in the region, and has held talks with other companies including Malaysia’s Petronas Gas Bhd and Brazil’s Petroleo Brasileiro SA, Bilgin said.
–With the assistance of Elena Mazneva.
