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19-04-23

Turkiye Begins Natural Gas Production from Black Sea Field to Reduce Energy Dependence

(MENAFN) Ahead of the country's approaching elections, Turkiye has announced the start of natural gas production from the largest field in the Black Sea. The production from the Sakarya offshore field will be cheaper than imported gas and is expected to reduce the country's foreign dependence on energy and cut household bills. With the country consuming about 53 billion cubic meters of natural gas per year, the field's production will have a significant impact on Turkiye's economy.

The field, which is believed to hold about 710 billion cubic meters of recoverable reserves, will supply 10 million cubic meters per day in the beginning, with an expected rise to 40 million cubic meters by 2028 in the second stage. Turkiye will produce natural gas jointly with Turkish Petroleum, Schlumberger NV, and Subsea 7 SA. However, it is still unclear how much Turkiye could export this non-Russian gas to European markets, as the country has pipeline connections with Bulgaria and Greece.

According to Madalina Sisu Vicari, an independent expert on energy geopolitics, the Sakarya gas field has immense national importance for Turkiye, which is near-totally reliant on energy imports. Turkiye's near-total dependence on fossil fuel imports has always triggered significant vulnerabilities, both economic and geopolitical. In 2022, Turkiye's bill for energy imports, driven by the surge in oil and gas prices, rose by 90 percent, compared with the previous year, and totaled $96.55 billion.

The domestic gas production from the Sakarya gas field could make a significant contribution to the development of the Turkish energy industry and the growth of the economy. It can supply between 25 percent and 30 percent of the country's domestic demand, which is likely to bolster Turkiye's own energy security and economic welfare by slashing the bill of energy imports, narrowing the account deficit, and eventually reducing the domestic energy prices. However, Russia's position as Turkiye's dominant gas supplier has been bringing important challenges for Turkiye's geopolitical balancing policy, especially in the context of the Ukraine war.

According to Pinar Ipek, an expert on energy security from TOBB Economy and Technology University in Ankara, Turkiye's energy dependence on Russia remains a challenge in light of regional energy geopolitics. Turkiye has an asymmetric interdependence with Russia in regional energy geopolitics, although it tries to reduce the share of pipeline-bounded natural gas imports. The domestic gas production from the Sakarya gas field could grant Turkiye more leverage in its bilateral relations with Russia, but it remains to be seen if Ankara is willing to convert it into geopolitical and geo-economics gains and how they would be translated into policy actions.

The Sakarya gas field's production could also theoretically play a role in Turkiye's aim to become a gas hub. However, the concept of the gas hub is not yet clarified. It could be a hub for different suppliers who negotiate and buy gas or another pipeline project like TurkStream, which only passes through Turkiye. Furthermore, there is another element of the gas hub that is not yet clear, which is the possibility of Russian gas using the hub. This is a critical element because it could contribute to Gazprom's regional position consolidation in the context of the EU's efforts to ditch Russian energy.

Overall, the natural gas production from the Sakarya offshore field marks a significant milestone for Turkiye's energy sector and its economy. The domestic gas production is expected to reduce the country's dependence on energy imports and cut household bills. However, its impact on regional energy geopolitics and Turkiye's bilateral relations with Russia remains to be seen.
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