Turkey to begin production at “biggest” natural gas field in Black Sea
(Bloomberg) – Turkey will start natural gas production from the biggest field in the Black Sea on Thursday, giving President Recep Tayyip Erdogan an opportunity to slash consumer energy prices less than a month ahead of elections.
The Sakarya field will supply 10 MMcm per day in its first phase, rising to a peak of 40 MMcm by 2027-28 in the second stage, state-run producer Turkish Petroleum AO said.
That would be enough to cover about a quarter of Turkey’s current consumption of 53 Bcm per year, providing a welcome dent in the $97 billion annual energy import bill that’s driving a growing current account deficit.
Energy Minister Fatih Donmez has previously said the gas will be produced cheaper than imports, and the Yeni Safak newspaper said Erdogan will use the opening to announce discounted or even free gas to some users.
TP hopes to export some of the gas to markets including Europe, Chairman Melih Han Bilgin told journalists during a visit to the processing facility in Zonguldak, on the southern coast of the Black Sea. But it would have to balance the financial incentive for sales abroad with Erdogan’s political promises to use the gas to cut bills at home.
Those commitments are clear at the site, where storage tanks are labeled with “We promised,” a reference to Erdogan’s commitment to develop the domestic expertise to realize the project. Engineers are challenged with extracting gas from more than 2 kilometers (1.24 miles) below sea level and 165 kilometers from the coast.
There’s no clarity yet on how much Turkey could export, but it already has pipeline connections with neighboring Bulgaria and Greece that could ship gas into Europe. If next winter is cold, the continent could face a fuel shortage and see increased demand for non-Russian supplies.
Russia cut most pipeline gas flows to the European Union in the fallout over the country’s invasion of Ukraine. However, Turkey has expanded cooperation with Russia. The two nations plan to turn western Turkey into a regional hub for the trade and transit of gas.
Turkish Petroleum, which developed the Sakarya field with Schlumberger NV and Subsea 7 SA, says the field holds 710 Bcm of recoverable reserves.
If successful in the Black Sea, TP hopes to export its newfound upstream expertise elsewhere. It’s already teamed up with Algeria’s Sonatrach to look for oil and gas in the region, and it has held talks with other companies including Malaysia’s Petronas Gas Bhd and Brazil’s Petroleo Brasileiro SA, Bilgin said.