Russia says will fill higher Turkey winter gas demand

ISTANBUL Sun Dec 2, 2012 3:12pm EST

Turkey's Energy Minister Taner Yildiz (R) shakes hands with his Russian counterpart Alexander Novak following a news conference in Istanbul December 2, 2012. REUTERS/Murad Sezer

Turkey's Energy Minister Taner Yildiz (R) shakes hands with his Russian counterpart Alexander Novak following a news conference in Istanbul December 2, 2012.

Credit: Reuters/Murad Sezer

ISTANBUL (Reuters) - Russia is willing to increase gas supplies to Turkey this winter if Ankara requests, Russian Energy Minister Alexander Novak said on Sunday, ahead of an expected surge in gas demand from the country which is struggling to diversify its suppliers.

Turkey, which ranks as Gazprom's (GAZP.MM) second-largest natural gas consumer after Germany, is forecast to see daily demand rise to near 220 million cubic meters this winter from 125 million currently, according to Energy Ministry officials.

Its limited underground storage capacity means it faces difficulties meeting high demand from its 75 million people as winter temperatures plunge.

"As has happened many times in the past, we have always helped Turkey when they have experienced problems managing during the winter," Novak told reporters in Turkey, a day ahead of Russian President Vladimir Putin's arrival in the country.

"If needed, and a joint agreement was reached, it is possible to do this again."

Gazprom clinched a long-term deal to export natural gas to private companies in Turkey last week, securing a growing market for the Russian gas export monopoly as it faces declines from its core consumers in the European Union.

The move followed a one-year impasse in gas trade between Gazprom and Turkish firms after state pipeline company Botas did not renew an expiring 25-year contract at the end of 2011 due to a pricing dispute. Business has continued in the meantime only on a short-term basis.

Turkey's Energy Minister Taner Yildiz told Reuters last month Ankara planned to enable Botas to buy natural gas on the spot market, a move that would help it meet demand during harsh winters.

NUCLEAR POWER

Novak also said Russia's Rosatom, which is set to build Turkey's first nuclear power plant, was eyeing building future plants in the country.

"Rosatom wants to be involved in the establishment of other nuclear power plants in Turkey. We have expressed our desire to be involved in negotiations on this," Novak said.

Turkey, which has ambitious plans to build nuclear plants over the next decade to reduce dependence on imported oil and gas, has reached an agreement with Rosatom to build a plant at Mersin on the Mediterranean coast.

It is also in talks with four other countries for a second plant at Sinop on the Black Sea and is planning a third plant.

Turkey, which is likely to overtake Britain as Europe's third-biggest electricity consumer within a decade and become an energy trading hub, is struggling to diversify gas suppliers.

It is largely dependent on the fuel because it produces the majority of its electricity via natural gas.

In a move that could see Turkey having to reduce its gas imports from Iran, U.S. senators and aides told Reuters last week the U.S. Senate may soon consider widening trade sanctions against Iran, including Turkish-Iranian "gold for gas" trade.

Turkey, which receives more than 90 percent of Iran's gas exports, currently pays its neighbor in Turkish lira to circumvent existing U.S. and European banking sanctions, which Iran then uses to buy gold in Turkey.

Yildiz said last week he did not see any clash with the United States over plans to widen the sanctions and said talks between both countries were ongoing.

Putin is expected to discuss energy and the ongoing crisis in Syria, which has strained ties between the two powers because of differences over how to resolve the conflict.

(Reporting by Evrim Ergin; Writing by Jonathon Burch; Editing by Sophie Hares)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.