December 7, 2015 [Platts] - Turkey and Qatar are discussing possible development of an LNG import terminal and gas storage facilities in Turkey, a Turkish energy ministry official told Platts Friday.
The official declined to give details, but the discussions follow the announcement Wednesday of a new provisional agreement under which Turkey will import regular cargoes of Qatari LNG.
The two countries Wednesday signed a memorandum of understanding under which Qatar will supply Turkey with unspecified volumes of LNG over a period that was also not specified.
Similarly no information was given on whether the cargoes would be sold according to a pre-agreed pricing formula or at spot prices.
Previous LNG agreements between the two countries have been reached in order to meet Turkey’s peak winter gas demand, with cargoes sold at spot prices.
Most recently, an agreement reached in 2014 allowed for Turkey to import a total of nine spot LNG cargoes totalling 1.9-2.4 Bcm, to be delivered over winter of 2014-2015.
In the event, winter temperatures were warmer than anticipated and gas demand did not reach expected peaks.
Details of spot cargo deliveries in monthly reports issued by Turkey’s energy regulator EPDK do not always specify the source country.
Most recently the report for July shows 0.269 Bcm of spot LNG imported from Qatar by private Turkish company Egegaz, which owns and operates an LNG import terminal at Aliaga on Turkey’s Aegean coast, with no spot cargoes imported in August or September.
Turkey’s only other LNG import terminal is that at Marmara Eregli, on the north shore of the sea of Marmara operated by state gas importer Botas.
Turkey has long been looking to attract investors to develop further LNG import terminals and further gas storage facilities.
Turkey’s only operational gas storage facility is in two exhausted underground gas reservoirs at Silivri on the northern side of the Sea of Marmara and operated by Turkey’s state upstream operator Turkiye Petrolleri (TP).
It has a maximum capacity of 2.661 Bcm, equivalent to only 5.5% of 2014 consumption which reached 48.72 Bcm, despite Turkey’s gas market law stipulating that gas importers must obtain storage capacity sufficient to hold 10% of their annual imports.
Turkey’s economy ministry has said it would offer up to $10 billion in incentives for development of a new gas storage facility to be built “near” the provinces of Mersin and Hatay on Turkey’s east Mediterranean coast, Turkey’s state news agency Anatolia reported late Wednesday, with the aim of stabilising Turkey’s gas supply security.
No further details were given.
