Page 18 - EurOil Week 42 2021

EurOil NEWS IN BRIEF EurOil

substantial contract in relation to the MWh by the end of June. But August and Putin also made the point that opening
development of a gas field in the Black Sea September saw the average spot wholesale Nord Stream 2 would be a solution to
that Ankara says is Turkey’s largest-ever price soar to new record levels of €70-80 Europe’s current energy crisis.
natural gas discovery, Daily Sabah has per MWh. “The Nord Stream 1 and Nord
reported. The crisis highlights Europe’s gas Stream 2 pipelines are set to ensure the
Schlumberger-Subsea 7 consortium, demand in the longer term, just as the EU sustainability of gas supplies to Europe and
which supplies engineering services for has launched its Green Deal and there is reduce GHG emissions,” Putin said.
undersea energy projects, has reportedly consensus over reaching net zero by 2050. Baseload demand will still exist by 2050,
been contracted to provide the engineering, Just how much gas Europe will need but it will be far smaller than today if the
procurement, construction and installation by 2050 is crucial. One forecast is that by EU manages to meet the targets set out
(EPCI) of end-to-end production solutions at 2050, Europe would need only 50-60bn in its Green Deal. Russia may still well be
the Sakarya gas field. cubic metres of unabated gas demand in asking the same question in 30 years’ time..
The integrated project scope will cover order to meet net zero, according to recent
subsurface solutions to onshore production, comments from Jonathon Stern at the
including well completions, subsea Oxford Institute for Energy Studies. Turkey concludes gas deal
production systems (SPS), subsea umbilicals, This compares with 380 bcm of demand
risers, flowlines (SURF) and an early in 2020, way below 469 bcm in 2019 . with Azerbaijan for 11bcm
production facility (EPF). As such, around 300-320 bcm of annual
Turkey has claimed the discovery of gas demand is set to disappear in Europe amid international energy
around 540bn cubic metres (bcm) of natural as the EU pursues alternative fuels.
gas in the Sakarya field since last year. The existing gas grid will also have to crunch
Ankara intends to aims to start pumping be retrofitted to cope with alternatives such
the gas to the national grid from 2023, with as biomethane, hydrogen and CCUS, and Turkey has concluded a three-year natural
sustained plateau production starting in 2027 be able contribute to a more hybrid system gas deal for 11bn cubic metres (bcm) with
or 2028. combining electrification and storage, Azerbaijan, energy minister Fatih Donmez
Turkey consumes between 45 bcm and ENTSOG, the trade body representing said on October 15.
50 bcm of natural gas each year, for which it national TSOs, said. Donmez added that the agreement was
pays between $12bn and $15bn. However, as key issue in both Russia for the delivery of the gas via the Baku-
and the EU’s thinking will be how much Tiflis-Erzurum pipeline until end-2024. He
of the smaller demand will be baseload, rejected what he claimed were efforts to
Green policies set to reduce meaning that it needs to be from a reliable paint a picture of Turkey facing an energy
problem amid the global energy shortfalls.
and long-term source of demand.
EU gas demand to baseload certain amount of gas-fired generation Claims that Turkey was purchasing gas
The EU’s Green Deal still calls for a
at expensive rates were also refuted by
core and gas demand from industries such as Donmez, who also went on to deny reports
that state energy companies Turkiye
chemicals, often abated by technology such
While the current gas crisis in the EU is as carbon capture, storage and utilisation Petrolleri and BOTAS are to be sold off.
seeing record-high wholesale gas prices, (CCUS). Hydrogen production will also Turkey’s is facing record demand for
hurting consumers and causing the latest continue to use gas, also propping up natural gas this year amid the economic
round of a supply disputes with Russia, future gas demand. bounceback from the coronavirus
the race to net zero by 2050 could have The UK, Norway and the Netherlands crisis. That is forcing Ankara to step up
deeper long-term consequences for EU gas are all set to see a decline in output, purchases on a surging spot market.
demand. especially as reaching Net Zero is based With winter approaching, time is
The EU’s Green Deal policy has on no new fossil fuel exploration, as called running short for Turkey’s energy officials
developed a wide range of policies and for by the International Energy Agency as they negotiate amid the energy crisis
targets to reach net zero, and gas demand (IEA). This is not so easy to follow, with, to roll over three long-term gas import
is likely to plummet as Europe accepts for example, the UK approving the Cambo contracts that expire before the end of the
renewable technology. field west of Shetland for exploration. year.
One key issue for fossil fuel exporters The other major source is Russia. Two contracts relate to Russian pipeline
into the EU is that greater energy Baseload demand is key for the Kremlin. gas shipments of 4bn cubic metres (bcm)/
independence is a key pillar of the Green Russian President Vladimir Putin told year each, while a third contract, which
Deal, meaning far lower fossil fuel imports. Russia’s Energy Week on October 13 that if expires this month, concerns 1.3 bcm/year
Meanwhile, the current volatile gas Europe wants more gas it has to sign new of Nigerian liquefied gas (LNG).
market is partly the result of Europe’s long-term supply contracts with Gazprom. A meeting two weeks ago in the Russian
preference for spot contracts on the “We have to know how much gas our Black Sea resort of Sochi between Russian
wholesale market, rather than long-term customers want,” Putin said. President Vladimir Putin and Turkish
contracts with the likes of Russia. This comes as Russian exports to President Recep Tayyip Erdogan ended
Demand in Europe has surged after the Europe have never been higher. In without the conclusion of a gas deal. Putin,
coronavirus (COVID-19) pandemic, aided September Gazprom guided for 183 bcm however, tried to reassure Ankara, saying
by cold temperatures, rising power demand of exports this year, but analysts say these Russian pipeline supplies would shield
and growing appetite for LNG in Asia. will reach 190 bcm for this year and could Turkey from the gas crisis.
Supply has proved unable to keep pace. easily be higher. The previous record As 2021 progressed, Turkey attempted
Wholesale prices rose from €19 per exports of gas to Europe amounted 200.7 to gain more leverage in renegotiating
MWh at the beginning of April €35 per bcm in 2018. long-term gas contracts by pointing to

P18 www. NEWSBASE .com Week 42 21•October•2021