ANKARA Turkey and China are in talks on a $10-12 billion investment deal for the Afsin-Elbistan coalfield and power plant project in southern Turkey, Energy Minister Taner Yildiz told Reuters.
Turkey is keen to make the most of its coal resources to reduce its imports of natural gas and signed a deal with Abu Dhabi National Energy Co (TAQA) TAQA.AD on the project in January 2013.
However, TAQA said in August it was delaying investment and Turkey subsequently began talks with other companies.
"There will be an investment of $10-12 billion in the Afsin-Elbistan field. This will include use of the coalfields. We are in talks with China for a deal on this subject," Yildiz said late on Sunday.
It was not possible to say when any deal with China might be signed, he said.
The Afsin-Elbistan region holds up to 45 percent of Turkey's lignite reserves and the project includes the construction of a 8,000 megawatt (MW) coal-fired plant.
"This is a big project. We have to set up the Afsin-Elbistan field project correctly. We have a big store of information. We are working with China on this," he added.
Lignite, or brown coal, is likely to play a bigger role in power generation as Turkey's economic growth bolsters electricity demand.
Yildiz said separately Turkey was not currently planning to be a partner in the Trans Adriatic Gas Pipeline Group (TAP) project, which is to transport gas from the Shah Deniz II field in Azerbaijan to Europe by the end of this decade.
The approximately 870-kilometre-long TAP pipeline will connect with the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before reaching southern Italy.
Yildiz said Turkey was to raise its stake in TANAP to 30 percent from 20 percent, with the remaining stake held by Azeri energy company SOCAR.
"The increase in our stake in TANAP will be more appropriate both in terms of the capital structure and the operation. Shares in both TAP and TANAP could change hands a lot," he said.
"TAP is not currently on our agenda. We will assess the subsequent developments," he said.
Yildiz said the plan was for gas flow on the TANAP project to be ready by the end of 2018, with initial gas transport of 16 billion cubic meters (bcm) annually. Turkey will take 6 bcm and the remaining 10 bcm will be sent to Europe.
Capacity is expected to increase to 31 bcm when the second stage of the project is completed.
(Writing by Daren Butler; editing by Dasha Afanasieva and Jason Neely)