Ukraine is happy to cooperate with Turkey to develop many fields of its energy sector, senior advisor to Ukraine's national natural gas company, Naftogaz's chairman said Wednesday.
Naftogaz is Ukraine's national natural gas vertically integrated company, which also operates as a transmission company carrying Russian gas to Europe. Europe meets its 23 percent natural gas needs from Russia and Naftogaz carries 70 percent of that amount from Russia to Europe via Ukraine.
“Turkey and Ukraine are potentially two of the largest gas markets in the region but the volume of cooperation between the two countries presently is at very early stages,” Sergiy Oleksiyenko, senior advisor to Naftogaz's chairman said in an exclusive interview with Anadolu Agency.
He stated that Turkey's emergence as a transit country for energy from the Central Asia to Europe will require lots of investments in infrastructure and underground gas storage facilities.
“Ukraine is operating one of the largest pipelines and gas storage systems in Europe. We can help Turkey with our expertise in building its required new energy infrastructure. The future of Central Asian gas coming to Europe depends very much on the ability of Turkey to master new infrastructure projects” Oleksiyenko emphasized.
- Cooperation expected for LNG tankers at Bosphorus
He explained that liquefied natural gas, LNG, currently is a more expensive source of energy than natural gas delivered by pipelines, however, the supply of LNG will increase by 50 percent in the next 5 years and significant reduction in the LNG price is expected.
Oleksiyenko stated that currently Turkey is importing LNG slightly cheaper than the Russian pipeline gas and LNG will potentially be even much cheaper.
“At the moment, use of LNG in Ukraine is not existent. We first need to construct the LNG terminal and have a source of LNG supply. We hope to cooperate with the Turkish government on this matter. We are ready to construct the LNG terminal but need the cooperation of the Turkish government on the safe, transparent and fair market principles for passage of LNG tankers through Bosphorus,” Oleksiyenko underlined
“To make this project possible, we are ready to discuss equity participation in Ukraine's LNG terminal with Turkey,” he offered.
- Turkey could save $1.4 billion for gas
Oleksiyenko stated that a number of countries in Europe pay excess amounts for Russian gas over hub prices.
“We launched a major new gas route between Slovakia and Ukraine in 2014. Thanks to that, we were importing nearly 70 percent of our needs from Europe in Q1 2015. The current interconnector’s capacity with the West can provide up to 90 percent of Ukraine's gas import needs,” he said.
“If we sign interconnector agreements with Slovakia, and enable the ‘big reverse flow’, we can supply up to 3.8 billion cubic meters of gas per year from European gas hubs to Turkey through the Bulgaria-Turkey interconnector. Turkey currently is the largest overpaying country for Russian gas. If Turkey has an option to import cheaper gas from European gas hubs, it could save more than $1.4 billion per year,” Oleksiyenko argued.
He also said as a potential benefit for cooperation between the two countries, Turkey's petroleum pipeline company, BOTAS, and Naftogaz can facilitate discussions so Turkey can acquire sufficient capacity of Ukraine’s huge natural gas storage.
“Russia practically undersupplies some volumes every year in the cold season, sometimes shortages occur in the Istanbul area. We can dedicate some gas storage in Ukraine for Istanbul,” Oleksiyenko concluded, adding that gas can flow through the Balkan pipeline and balance the shortage in Istanbul.
By Nuran Erkul
Anadolu Agency
nuran.erkul@aa.com.tr