ON BOTH SIDES OF THE BRIDGE - BOTAS
Mehmet Takiyyuddin BILGICH was born in 1953. He graduated in 1976 from Bristol University with an BSc in Economics.
Before starting his career he fulfilled his military service in 1982. He was employed at different companies both at home and abroad like Profilo Holding, Inc., BIMHOL, Combined Civil Engineers Holding, Inc., Erkal, Inc., Mebatas, Inc., Special Projects Department - General Directorate of Foreign Economic Relations - Treasury Undersecretariat, Mass Housing Public Participation Adm., UM Vessel Shipyard & Ind., IGDAS Istanbul Gas Distribution, Inc., Calik Holding - GAP Electricity Distribution Industry and Trade, Inc.
In addition, he held several major corporate positions in Ankara Cement, Inc., Ipragaz Inc., BHT Bosporus Air Transportation, Inc., USAS Aircraft Service, Inc., TURBAN Tourism, Inc. and AEG - ETI Inc. Since April 2003, he has been the chairman and general manager of BOTAS Turkey with its geographical location between the East and the West is trying to build up an energy bridge between her neighboring regions and strengthening her position as a Eurasian energy transport corridor between the rich eastern energy resources and the demanding European economies. This route will be one of the most important in the near future and Turkey is fully aware of this fact with its position on the route. In this context new projects are being developed which will also be of strategic importance for the European economies and newly developing Caspian nations.
Regarding these, two outstanding projects have already been launched. One of these projects will connect the Turkish natural gas grid to Greece and plan to transport the Caspian and Middle Eastern resources to European markets by reaching to Italy via Greece.
Second project is the one, which will connect the pipeline coming through Turkey to Bulgarian grid and reach to Austria via Romania and Hungary. It is obvious that these projects will provide benefits to the related economies by providing new supply sources to the energy markets of their own and by opening a new route for the Caspian and Middle Eastern resources as well.
BTC and BTE
Baku-Tbilisi-Ceyhan (BTC) crude oil pipeline and Baku-Tbilisi-Erzurum (BTE) natural gas pipeline are the two important pipeline routes empowering Turkey's role in the world energy markets. Following the completion of commissioning works in the first quarter of 2005 BTC Project is estimated to be fully in operation in the second quarter of 2005. Realization of this project will be a very important step for the nations of the Caspian region, especially for Azerbaijan, and this project will highly promote their efforts on economic development and independence. Also these projects will strengthen the relationship between Turkey and Azerbaijan.
Following figures can be given for the current state of the project. By January 2004 for Turkish section of BTC Project 99% of land acquisition activities have been completed. Besides 96% of procurement of Long Lead Items have been finalized earlier the scheduled calendar; production of pipes, valves, pumps, metering skids and fiber optic cables have been completed and these materials are currently being transported to the sites.
Construction works from Georgian border to Ceyhan are continuing without any interruption under three lots. As the end of January, 48% of survey and staking works, 36% of clearing and grading works, 26% of stringing works and 23% of welding works have been completed. Construction period including testing operations are expected to be finalized at the end of 2004. At the pump stations construction works are being carried on four pump station fields. By the end of January 2004 campsites for all pump stations are almost constructed, 85 percent of earthworks and 20% of concrete works have been finalized. Foundations of pumping and piping buildings have been laid in all stations and construction works have been started in these sections. In offshore section of Ceyhan Marine Terminal 30% of jetty piles have been placed and filling works have been completed. In onshore section construction works of tank farm is also continuing simultaneously. At the current stage excavation and backfilling works in tank farm area have been completed and in foundations. 80% of backfilling works has been completed. Welding works of plates for foundations and tank walls are continuing.
Procurement, engineering and production works in SCADA and Telecom systems are on schedule. By the beginning of summer, in 2004, contractors will access the site and necessary installations are expected to be finalized by the end of 2004.
Regarding the BTE Project, the agreement for the transportation of Azerbaijan gas to Turkey was signed. This agreement is encouraging for the ongoing studies and it isn't expected to be any delay on the schedule. Currently BOTAS has put BTE project in its investment programme in 2004. BTE project is estimated to be 225 km. in length and most probably 48" in diameter in Turkish territory which will connect the BTE pipeline from Georgian border to Horasan (Turkey) which is the junction point to existing transmission line.
The pre-feasibility study for Turkish section has been completed and beside this all the obligations will be undertaken within the terms of agreement by BOTAS. Turkey and respective company BOTAS has capability to construct the Turkish Section of BTE Natural Gas Pipeline Project having the experience many kilometers high-pressure pipeline. So the delivery of Shah Deniz is expected to begin in the 2006-2007 period as stated in PSA.
Cherished reexport
At the current stage of the engineering studies of the Turkey-Greece natural gas pipeline project has been finalized. This project is expected to be finished in 2006 with the initial transportation capacity of 750 MCM. The deadline for the construction is estimated as 2006. The tender for the construction will be announced in 2004 and will be evaluated in the possible shortest time period. Meanwhile the necessary rehabilitation studies in order to reach the plateau period capacity will be carried on in the Turkish grid. The deadline for the tender studies in Italian extension is expected to be 2006 and the 2008 is estimated as the starting year of operation. 30% of the construction costs in the Greece section would be granted by the European TEN programme.
With the construction of this pipeline new supply sources find an opportunity to be introduced to the European markets. Currently there are several natural gas suppliers which transport their gas to Turkey. Also BOTAS is continuously seeking for new opportunities.. The gas consumption in Turkey jumped in 2003. Turkey has consumed about 21.2 BCM natural gas last year. This level was around 17.6 BCM at the end of 2002. The existing tendency in the demand of natural gas is expected to rise in the following years and to reach 25 BCM or more at the end of 2005.
Currently Turkey is importing natural gas from Russian Federation (60%), Iran (17%) and LNG from Algeria (18%) and Nigeria (5%). The quantities imported and respective shares of these countries are as follows. 12.7 BCM has been imported from Russia, 3.5 BCM from Iran, and 3.9 BCM of LNG from Algeria and 1.1 BCM LNG from Nigeria. In the year 2006 Azerbaijan will begin the delivery of natural gas and Turkmenistan will follow this country.
Directing different sources, including indigenous production, to the Turkey-Greece natural gas pipeline is completely necessitating suitable terms and conditions in agreements. If the necessary legal terms are developed (including re-exportation rights) for these sources, Turkey can consider this project.
At the present situation there isn't any improvement in the conditions of delivery of the Turkmenistan gas to Turkey. Turkey is still keeping and undertaking the obligations under the terms and the conditions of the agreement signed between BOTAS and the Competent Body for Use of Hydrocarbon Resources at the President of Turkmenistan.
As a candidate for the EU membership, Turkey is reorganizing her energy markets, trying to build up the necessary conditions for the competitive market structure and these studies are realized in accordance with the EU directives.
One of these efforts is the law no. 4646. According to this legislation on the natural gas market in Turkey, every year 10% of existing natural gas contracts is planned to be transferred to the private sector enterprises. BOTAS, as a state owned company needs to satisfy this requirement primarily. But such a transfer of these agreements is bounded with the legal consent of related parties. In order to obtain their consents on this matter new plans and strategies are being developed.