Turkey and Mediterranean Gas:
What does it Mean for Europe and the World?
A Post-Ukraine Prognosis
John Roberts,
Energy Security Specialist, Methinks Ltd
EUCERS/ISD/KAS Energy Talks
King’s College, London
10 March 2014
Turkey’s Need for Gas
• Gas demand in 2020
• A gas shortfall: Sooner than we think?
• Misjudging the European market: Supplier problems and the
Southern Corridor
Eastern Mediterranean: Too Early to Judge
• No realistic figure for export availabilities in 2020.
• Export destination: Probably Europe but what prospects for reaching
Turkey?
• Overall: IF Leviathan is approved for export, then perhaps 15-20 bcm/y
by 2020.
• IF Aphrodite’s reserves are augmented, then LNG scale deliveries in the
2020s.
• NOTE: Good prospects for further discoveries but seismic not the same
as drilling.
East Med EEZs: Different Concepts
Northern Iraq: Gas from Kurdistan
• Stranded production, not just stranded resources.
• November 2013: Government of Turkey signs a GSA with the KRG
on gas exports to Turkey.
• Volumes set at initial 4 bcm/y in 2017, 10 bcm/y by 2020 and an
option to move to 20 bcm/y thereafter.
• Principal resource base: Genel Enerji’s fields at Miran and Bina
Bawi.
Azerbaijan: Volumes to Turkey
• Shah Deniz Phase II: 2-6 bcm 2019 -2012
• Shah Deniz Phase I: What happens post-2020?
• Absheron and the ‘Next Wave’ of Azerbaijani gas exports
Iran: The Unknown Factor
How ready for export?
The Rouhani Administration and old priorities
The OIES view (David Ramin Jalilvand):
• 20-30 bcm of exports in c. 2025
• No prospect of 50 bcm/y exports until the 2030s.
The subsidy issue
A truly reformist government?
Iran: A Near-Term Major Exporter?
• Iran Gas 2013-2016
• Production, Consumption and Export Availability (in bcm)
1981
2012
BP
BP
2013
BK
2016
BK
• 2016 Production
6.0
160.5
200.8
306.6
• 2016 Imports
n/a
9.4
8.0
9.9
• 2016 Consumption
5.7
156.1
198.9
240.9
• Export Availability
n/a
13.8
9.9
75.5
• Net Export Availability
0.3
4.4
18.3
65.7
• Sources: BP Statistical Review June 2013; Bijan Khajepour (Sept 2013)
• NOTE: BK Figures appear to be gross production (a 37 cm difference in 2012).
South Stream & Russia’s
Southern Corridor (Gazprom 2011)
How many strings?
What destination?
EU negotiations?
Turkey: The residual market?
Russia: South Stream & Turkey
• How many strings?
• What destination?
• EU negotiations?
• What cost?
• Turkey: The residual market?
Russia: Post-Ukraine
• No such thing as ‘cheap gas’
• The use of force and energy security
• The increased cost of bailing out Ukraine
• The EU and South Stream’s onshore connections to both the EU
and Turkey.
South Stream: An Announcement
• “South Stream Transport is honoured to announce that a Final
Investment Decision (FID) has been taken for the South Stream
Offshore Pipeline in accordance with the Shareholders Agreement.
The FID was made today in a Shareholders’ meeting subsequent to
the meeting of the Board of Directors of South Stream Transport.
The minority Shareholders maintain the right to leave the Project
in case certain conditions will not be satisfied in the future.
South Stream Transport,14 November 2012, Amsterdam
Conclusions
• East Med: Don’t rule out Turkey market; indirect impact on
Europe.
• Iraq. 5-10 bcm/y to Turkey by 2020; indirect impact on Europe.
• Shah Deniz/Caspian: 10 bcm/y (16 bcm/y) in 2020; subsequent –
but delayed – throughput expansion.
• South Stream: Pre-Ukraine: Two strings probable; four strings
questionable. Post-Ukraine: Who knows?
• Iran: The great unknown.
Questions?
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John Roberts
Energy Security Specialist
Methinks Ltd
New Mill House
Jedburgh TD8 6TH
Scotland UK
Email: john.roberts@methinks.org.uk
Tel: +44-1835-863725 (home)
+44-7966-290354 (mobile)
South Stream
South Stream
Gazprom Prices in IH 2012 -
Izvestia, 2/04/2013