Global oil and gas industry leaders met in İstanbul yesterday at the first annual “StocExpo Turkey and the Black and Caspian Seas” in order to discuss changes in Turkey’s energy market and to focus on expanding terminal and storage sectors.

The message of the morning speakers at the conference was that Turkey is not only a bridge of cultures and civilizations, but is also a continental bridge between the haves and have-nots in energy matters, and as such, needs to dramatically increase its storage related infrastructure if it is to realize its goal of becoming a global energy hub.
The numbers are impressive: Millions of tons of oil and millions of cubic meters of gas now pass through Turkey towards international markets. Ceyhan in particular, located on the Mediterranean coast, receives enormous amounts of fuel destined for international destinations.
Speakers such as Mehmet Habbab, the chairman of Delta Petroleum Products Trading and Dr. Erol Metin, the secretary-general of Petder, said if Ceyhan is to fulfill its potential of becoming a port that can handle upwards 300 million tons of oil per year, it will need to increase its storage facilities from a present capacity of 3 million to 35-40 million metric tonnes. Firat Yemeniciler, the managing director of Poliport, reinforced this point during a seminar titled “Managing a Major Storage Operation in Turkey,” when he said that “without these [storage facilities], the system will collapse.”
According to Habbab, the largest single barrier to entrepreneurs stepping in to facilitate this is a weighty amount of government red tape. Comparing Ceyhan to Rotterdam, he noted that whereas the latter offers virtual “turn-key” solutions to set up storage and processing facilities, in the former, the process can take several years to complete the approval process. In addition, Habbab asserts that Turkey’s Energy Market Regulatory Authority (EPDK) needs to take its attention off the domestic market and set its sights on the larger transit market.
Pipelines from Azerbaijan and Iraq are only a few of the already existing oil pipelines that carry gas to Ceyhan. The number is expected to grow exponentially over the coming years as increasing pipelines, such as the Samsun-Ceyhan, begin to operate and as existing pipelines increase their output. Gas pipelines such as the planned parallel line to the Kirkuk-Ceyhan one are also being planned, as well as an extension of the already existing Blue Stream gas pipeline, making Ceyhan the main hub for the Mediterranean, Black Sea and Europe. Some commentators have even speculated that Ceyhan’s strategic location could even be used to act as a distribution hub for lands as far away as the Americas. Unfortunately these aspects will not be used to their full potential and profit will not be maximized as Turkey lacks the infrastructure, and planners are deficient in their foresight to take advantage of this opportunity.
Another hot topic at the conference involved the need to create “strategic stocks” of oil and gas reserves, with some speakers asserting that Turkey needed to increase its storage facilities and suggesting that Turkey may even be able to serve as a strategic warehouse for other countries wishing to store fuel supplies.
However, Necdet Pamir, a representative of Attila Doğan Construction and Installation Co., was skeptical of Turkey being able to fulfill this role. In an interview with Today’s Zaman, he asserted that the present storage capacity for gas stands at only around a billion cubic meters and that the only other “feasible” proposed facility under Lake Tuz in Central Anatolia not only has difficulties in finding financing for the project but also the lake would, at maximum, only have an approximately 1 billion cubic meter capacity — hardly enough for a strategic storage of gas considering Turkey’s pre-existing storage shortages. In light of the current financial crisis, Pamir also highlighted the difficulties in obtaining financing on the scale required to fund such a large infrastructure project at present and felt that this problem would have a negative impact on all of Turkey’s energy-hub plans.
The practice of strategically using foreign countries for storage is not uncommon. South Korea, for instance, keeps stocks in Norway. Strategic stocks are kept not only in order to adjust for increases in seasonal demands, but also in order to confront any threats to energy supplies. Under new Turkish regulations that are expected to be passed soon in order to harmonize standards with the EU, a 90-day fuel reserve will be required.