Page 13 - EurOil Week 01 2023

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Turkey announces Black Sea $3.2bn is believed to be required to achieve reserve for the bloc.
first gas.
Ukraine’s gas transportation system (GTS)
gas resource boost from Sakarya would ramp up to reach a peak noted Ukraine’s UGS facilities can store more
Meanwhile, Erdogan added that output
than 10bn cubic metres of EU gas. The GTS
Turkish President Recep Tayyip Erdogan has of around 15 bcm per year in 2026, a year later operator and the underground storage system
announced a 170bn cubic metre increase in than previous guidance. operator also said they will work together to
the country’s estimated natural gas reserves as On December 27, Donmez said that work attract international gas traders.
part of its ongoing exploration efforts in the on the onshore sections of the pipeline that In October, Ukraine saw an increase in
Black Sea. will connect to the domestic grid are nearly European gas. Ukrainian Energy Minister
Speaking following a December 26 cabinet complete, with 36 km of pipe already laid. Herman Halushchenko encouraged European
meeting, Erdogan said that a re-evaluation of nations to take advantage of the cheap gas
data from the Sakarya gas field had provided prices at the time and utilise Ukraine’s UGS
a boost of 112 bcm to 652 bcm, while sizeable Turkcell to deploy private 5G facilities.
additional resources had been discovered “Gas prices are their lowest for several
through nearby drilling work. network on SOCAR Turkiye’s months. A great opportunity to use Europe’s
Turkish Petroleum’s (TPAO) “Fatih drilling largest underground gas storage facilities
vessel has discovered 58 bcm of natural ‘petrochemical, refining with 15bn cubic metres of spare capacity.
gas reserves 3,023 metres below the sea Additional gas volumes will be needed this
level at [the] Caycuma 1 block. We expect peninsula’ winter,” Halushchenko wrote on social media.
this number to be revised upward with the Over the summer, it was announced
new exploratory wells we will open. Our Orlen Lietuva (Orlen Lithuania), the that Ukraine will invest $500mn into
new discovery will pave the way for similar Lithuanian branch of Poland’s oil group Orlen, developing gas storage facilities. The Gas
discoveries in other geological fields adjacent posted €26.8mn in net profit for the third Storage Development Plan for 2022-2031 was
to the region,” he said. quarter of this year, BNS, a Baltic newswire, approved by Ukraine’s National Commission
The discovery of Caycuma and the Sakarya reported. for State Regulation in the Energy Sector.
upgrade increases the total volume of gas In July-September, Orlen Lietuva earned The project will allocate $277mn to construct
discovered in the Turkish sector of the Black $2.242bn (€2.16bn) in revenue. underground gas storage (UGS) facilities and
Sea to 710 bcm, which Erdogan said is worth A favorable macroeconomic situation was $168mn will be used to develop infrastructure
$1 trillion at market rates. behind the company’s better third-quarter facilities and reconstruct UGS technological
He explained that Caycuma would be financial results, the company said in a equipment.
tied back to the mainland via infrastructure statement.
dedicated to the Sakarya field. Ebitda halved to $119.6mn (around
In September, TPAO said that it was €115.4mn) during the period. Turkey’s gasoline prices fall
expecting to begin feeding first gas into the Orlen Lietuva ended the second quarter
Turkish grid in March 2023. in the red as it incurred a loss of $209mn below 18 lira per litre
At the time, Turkish Energy and Natural (€204.4mn based on the exchange rate of
Resources Minister Fatih Donmez was August 5). The gasoline price (unleaded 95 octane) at
quoted by local media as saying: “We have 30 Opet stations on the European side of Istanbul
ships operating at sea. 140 km of the 170- fell to Turkish lira (TRY) 17.43 ($0.93) per
km [16-inch (406mm)] of pipeline has been Ukraine to enter EU’s underground litre on December 12, still up 69% y/y, but
completed. 70% of the pipelines on land have down from the record high of TRY 28.46
also been laid,” he said while visiting Saipem’s gas storage market registered on June 13, according to data
Castorone pipelaying vessel. He added that provided by Opet (chart).
around “32 km of the 10-inch [254mm] Ukraine will enter the underground gas In approximately the same period, the
pipeline, designed as an auxiliary line, have storage (UGS) market in the European diesel fuel (Eco Force) price fell to TRY
been completed too”. Union, Ukraine Business News reported on 21.05 on December 7, still up 104% y/y but
Casterone is installing the 165-km deep- December 15. considerably lower than the record high of
water section of pipeline, with Saipem’s Following the implementation of two TRY 29.94 registered in June.
Castoro 10 chosen to deploy 5 km of pipeline decisions and the adoption of the EU draft The annual price increases for diesel
in shallow water, which was completed in July. law no.8158, Ukrtransgaz, Ukraine’s gas and gasoline’s topped 316% and 269%,
Sakarya was first discovered by TPAO in transportation system operator, will be respectively, at the price peaks.
August 2020 with the 320 bcm Tuna-1 well, certified to operate in the EU and be officially Gasoline prices in Turkey are automatically
which was subsequently upgraded to 405 recognised as compliant with EU regulations. updated based on a formula. The variables
bcm two months later and renamed. In June The National Energy Regulatory Commission are the Brent oil price, crack margins (CIF
2021, the company announced that it had also backed Ukrtransgaz’s certification. Med), the USD/TRY rate and the special
found another 135 bcm with the Asmara-1 As such, Ukraine will be able to use its consumption tax (SCT).
well, taking the total volume discovered to 540 vast UGS facilities, the largest in Europe, As of December 14, Brent was up 8% y/y to
bcm. to store commercial gas reserves belonging $81 (down from the $120s seen in June) while
The pipeline will connect Sakarya to gas- to European companies as well as strategic the USD/TRY pair was up 35% y/y to 18.65.
processing facilities under construction at reserves previously collected at the state level. The diesel differential stood at $43, up
the port of Filyos in the northern province of In addition to strengthening its own 747% y/y but sharply lower compared to the
Zonguldak. energy security, Ukraine says its facilities can record $83 seen in October. The gasoline
Erdogan’s December comments echo a benefit Europe too. The war-torn country differential stood at $6, down 30% y/y but
statement in June in which he said that the has enthusiastically offered its facilities to greatly lower compared to the record $54 seen
field’s first development phase would yield the EU since the start of the energy crisis in June.
10mn cubic metres per day (3.65 bcm per and expressed willingness to participate in
year) of gas. Capital expenditure of around creating and maintaining a gas insurance

Week 01 05•January•2022 www. NEWSBASE .com P13