Experts say it takes time and money for Turkey to be a gas hub

Experts say it takes time and money for Turkey to be a gas hub
Update: 14 October 2022 14:38
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Given Europe's reluctance, Putin may be planning to reach eastern markets through Turkey, some experts say.

Russia’s President Vladimir Putin throughout last week cooked the idea of making Turkey a “gas hub” and selling natural gas via Turkey, while Europe more and more shunned his country.

The move was considered by European media as an eyewash for the peoples of cornered Russia due to war in Ukraine and Turkey which is heading elections next year, as a Euronews  headline said Russia was “selling a dream” to Turkey and another one by Reuters said Putin was “courting Erdogan.”

But what exactly is a “gas hub” and is it easy for Turkey to cash in on the project in a time of war?

Experts say the idea of becoming a gas hub is favorable in theory, but it requires certain conditions and a timespan of 3-4 years at best.

Commercial, legal and technical problems

Turkey lacks commercial and legal conditions that are indispensable to be gas hub, and pipeline capacity is not enough either, according to Ali Arif Akturk, former natural acquisition head of Turkey’s BOTAS (Petroleum Pipeline Corporation) and an energy consultant with 32 years of experience in natural gas and energy markets.

Investments are required for new pipelines, but there are only a few companies capable of producing and constructing pipes in the deep sea line. These are German and Japanese companies and it is difficult for Russia to do business with them due to the sanctions imposed due to the Ukraine war, Akturk said, in an interview with Deutsche Welle Turkish.

Putin's initiative on a gas hub in Turkey came at a time when Russian gas deliveries to Europe are being hit hard by Western sanctions against Russia, with the EU considering a cap on gas prices in the face of rising energy bills caused by Russia's offensive in Ukraine.

“Putin is looking for an outlet. He saw Turkey as close to himself in the western bloc. Also, the elections are due  in Turkey and the Turkish people love this kind of rhetoric to be a gas hub. People think that we will buy and sell Russian gas and make money,” Akturk said. 

Europe did not buy the project

Germany immediately objected to being a part of such a project.

“We have seen that Russia is no longer a reliable energy supplier, and that even before the damage to Nord Stream 1 there was no longer any gas flowing,'' German government spokeswoman Christiane Hoffmann said.

The French presidency on Thursday also snubbed Putin’s proposal. “There is no sense in creating new infrastructure that allows more Russian gas to be imported,” a statement said.

Eastern markets an alternative?

Given Europe's reluctance, Putin may be planning to reach eastern markets through Turkey, some experts say. 

“Russia can not embrace enough the eastern markets. In summer, travel from the top of the North Sea to China is easier but come winter, Putin cannot use the North Sea line and has to cross the Suez Canal to reach the Chinese market in about 40 days by. However, the same operation takes 15-20 days in the summer. So, I think he may be considering establishing a liquefaction plant in the Mediterranean. He may be thinking, 'Let's bring this gas up here, if Europe buys, that is ok, if not, we will liquefy it and sell it to the East'. Thus, Turkey can become Russia's gateway to the Mediterranean,” said Mehmet Dogan, Managing Director of GazDay Energy Consultancy.