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. Last Updated: 07/27/2016

Trans Caspian Gas Favored by Turkey

ANKARA, Turkey -- A $2.5 billion plan to bring Turkmen gas to Turkey through a Caspian Sea pipeline will be the first of three gas projects to come to fruition, Turkish President Suleyman Demirel said.

Demirel, speaking to reporters late Monday aboard his plane returning from a one-day trip to Azerbaijan, said Turkey needed gas immediately and would get it from the most available source. "The Turkmen gas project is the most imminent," Demirel said, when asked which of Turkey's three major gas pipeline projects would come on line soonest.

Turkey, expected to consume 13.5 billion cubic meters this year, has struck pipeline gas agreements with Russia, its chief supplier at present, Iran and Turkmenistan, and liquefied natural gas deals with Algeria, Nigeria and Egypt.

Demirel rejected Russian criticism earlier this month that Turkey preferred the Turkmen option to a Russian gas project, which envisages a pipeline under the Black Sea.

"We will need 53 bcm of gas in 2010. So we get gas from whoever has it. We do not care where it comes from," he said. Several gas-rich countries in the region, especially Turkmenistan, Iran and Russia, are eyeing the Turkish market - seen as the fastest growing in the world, to sell their hydrocarbon potentials and thus help their ailing economies.

Under the so-called Blue Stream project with Russia, Turkey will get 16 bcm of gas through a 1,200 kilometer $2.5-billion pipeline, to be built by Russia's Gazprom and Italy's ENI. About 400 kilometers of the pipeline will be laid under the Black Sea.

But Turkey's ethnic ties with Turkmenistan are seen to be giving the Turkmen gas pipeline project, which will supply 14 bcm a year from 2003 through a pipeline to be built by a U.S. consortium, priority over other projects.

Energy analysts have said the project will also lessen Turkey's dependence on Russian gas and break Russia's energy monopoly among the energy-rich former Soviet republics.

But they also point out that the 2,000-kilometer pipeline project, priced at about $2.5 billion, would not be easy to finance. "There is not a viable finance package before the consortium. It is too early to be optimistic about that pipeline," a Western oil analyst said.

Turkey also struck a deal with Iran in 1996 to get 3 bcm a year from 2002 through a pipeline. The amount will rise to 8 bcm from 2005. Turkey's close ally, the United States, opposes the deal.

Turkey has begun building a 1,100 kilometer pipeline from the Iranian border to Ankara for the Iranian gas. The pipeline's 800-kilometer section from the eastern town of Erzurum to Ankara will also be used for Turkmen supplies.

BP Amoco on Tuesday threw its weight behind an ambitious plan to pipe landlocked Caspian oil from Baku to world markets through Turkey's Ceyhan port, apparently abandoning doubts about the project's viability.

A spokesman said BP Amoco would take a lead in helping companies work with governments and others to assemble financing for a $2.4-billion pipeline from Azerbaijan to the Mediterrranean terminal.