In 2012, Turkey and Azerbaijan signed an agreement to construct a new pipeline that would carry Azeri gas to Turkey. The project is expected to be completed in 2018 and is projected to carry16 billion cubic meters (bcm) of natural gas, 10 bcm of which will be transported to Europe and 6 bcm of which will be used by Turkey.
The Trans Anatolian Natural Gas Pipeline Project (TANAP) official website states that the volume of gas that will be exported is expected to increase in 2023 to 23 bcm and the volume of gas to be transported will be 31 bcm as of 2030.Ìý
In 2013 British Petroleum (BP) and the State Oil Company of Azerbaijan Republic (SOCAR) signed an agreement on another natural gas pipeline called Trans-Adriatic Pipeline (TAP), which is estimated to cost around $5 billion. This pipeline will transfer Azerbaijani natural gas to the European market. The main source of gas will come from the Shah Deniz II in the Caspian Sea. The pipeline will connect Azerbaijan to Georgia and from Georgia it will extend to the Turkey-EU border where it will reach its final destination: Europe. Both the Trans-Anatolian pipeline and the Trans-Adriatic Pipeline will constitute the Southern Gas Corridor.
It is estimated that in the future TANAP will be able to carry more natural gas due to the possibility of carrying Iraqi gas. When political stability returns to Iraq, Iraqi gas can be connected to the TANAP grid and therefore this normalization process would increase gas supply volumes. Iraq, Turkey and eventually Europe could benefit from this diversified energy supply. Nevertheless, political tension seems set to continue for the foreseeable future and the possibility of currently realizing this project seems slim due to Iraq’s internal security problems.
Once the Southern Gas Corridor becomes operational, both Turkish and Azerbaijani relations with Europe are likely to strengthen and therefore, with TANAP, Turkey’s position in the accession negotiations towards becoming a member of the European Union (EU) is likely to improve. As stated by energy market specialist from Turkey’s Energy Market Regulatory Authority (EMRA), Erkan Erdogdu “the TANAP and TAP projects mean the pipeline will no longer be used by Europe as a bargaining tool in its policies towards Azerbaijan and Turkey, but will instead give more power to Azerbaijan and Turkey in their relations with the EU.�
Another important point with the TANAP project, is in Turkey’s ability to secure the right to re-export as much as 750 million cubic meters of excess gas reserves to other countries annually, and Greece in particular is likely to be a major recipient of such reserves. Azerbaijan allows Turkey to re-export its gas and to profit from this incentive, while Russia and Iran do not. Therefore Turkey will not only profit from the transit fees of the transportation of gas across its land but also may benefit from the re-exportation of gas.
For this reason, on completion of TANAP, Turkey could become one of the major energy transit states in the region. Nevertheless, to become a major energy hub, Turkey will have to continue to develop its energy commitments, and for instance build bigger storage facilities and terminals. Developing a strong infrastructure would also strengthen Turkey’s hand in fulfilling the basic requirements for becoming a genuine energy hub.
Nevertheless, it would be over-ambitious to claim that TANAP will be a game-changer and play a major role in both energy security and diversification of energy sources in the short-term with a projected volume of only 16 bcm. Only by increasing the amount of gas transported to the level of 31 bcm in 2030, supported by Turkmen or Iraqi gas, which would increase the volume to such a level, would Turkey’s position as a potential energy hub become more achievable, particularly when considering fact that in 2015 OECD-Europe consumed 453.4 bcm of natural gas, according to data provided by BP Statistical Review of World Energy June 2016.
Ìý