UPDATE 1-Turkey presses for delay-free Algerian LNG

Wed Apr 30, 2014 6:24am EDT

(Adds details, quotes, background)

By Orhan Coskun

ANKARA, April 30 (Reuters) - Turkey hopes to renew its liquefied natural gas (LNG) contracts with Algeria but it must first ensure that deliveries are timely, Energy Minister Taner Yildiz told reporters.

Turkey's contract to acquire 4 billion cubic metres (bcm) of LNG from Algeria's Sonatrach expires at the end of the year, and officials from both countries are in talks to renew it, Yildiz said.

"We want to renew this contract, and they do as well. We have reached a basic understanding but we made it known that we do have a couple of wishes, the most important of which is that we want the deliveries made on time," he said.

Turkish energy officials said delays of up to several days in the delivery of LNG from Algeria have increased in recent years and this has created difficulties for Turkey, especially during winter months when demand for gas to heat homes and run power plants soars.

Turkey imports 98 percent of the gas it consumes, and nearly half of its power plants run on gas. Besides Algeria, it has an LNG agreement with Nigeria and procures gas via pipelines from Russia, Iran and Azerbaijan.

RUSSIAN GAS

Russia has expressed interest in acquiring or building Turkish gas-fired power plants and will also propose building a natural gas storage facility here, Yildiz said.

Russian energy officials are investigating a location for the facility, officials said.

Turkey has storage of about 2 bcm and is building an additional 5 bcm of capacity. Officials say this still falls short of its storage needs.

Yildiz also said he did not expect that political tensions in Ukraine would affect the flow of gas to Turkey on the Western pipeline, which delivers 16 bcm of Russia fuel to Turkey.

Ukraine is a major transit route for Russian gas to Turkey and Europe, and disputes between Russia and Ukraine have disrupted supplies in the past.

"I do not foresee any cuts in natural gas on the Western pipeline but if there were, some issues on Turkish supply security would emerge, but not for electricity. I don't expect such a risk," Yildiz said.

A second pipeline, Blue Stream, sends Turkey about 14 bcm of Russian gas. (Writing by Ayla Jean Yackley; Editing by Daren Butler and William Hardy)

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