Would Turkey's emergence as 'gas bazaar' be beneficial?
Rem Korteweg, senior research fellow at the Centre for European Reform, also reiterated that Turkey's importance for Europe as a transit country for non-Russian gas.
"By 2019 Azerbaijan will be exporting 16 billion cubic meters through the Southern Gas Corridor. The corridor uses the TANAP to transport gas across Turkey to the Greek border and 6 bcm will stay in Turkey, 10 bcm will be exported to Europe through the Trans Adriatic Pipeline (TAP) pipeline. In the future, Turkey could also become a transit for gas from other places in the region, from across the Caspian, from Northern Iraq, perhaps even from Cyprus if a peace agreement is signed, or from Iran," he said.
Korteweg noted Turkey's crucial role in the future to develop sufficient diversified sources of gas supplies to meet both domestic and Europe’s energy security objectives, given that the share of imported natural gas in Europe’s energy mix, is likely to increase over the next decades.
"If Ankara is able to reach an agreement with Moscow on the construction of the Turkish Stream, Turkey could also become an alternative route for the export of Russian gas into the European market," he said.
He defined an energy hub as a place where energy sources, mainly gas or crude oil, are traded and distributed.
"Because they are locations for the sale and purchase of – in this case – natural gas, energy hubs usually have their own pricing system. Think of Henry Hub in Louisiana, or in the Netherlands, the Title Transfer Facility, or the Central European Gas Hub in Baumgarten, Austria," he said.
He clarified that a functioning gas hub ideally has multiple sources of gas, multiple options for distribution, like pipelines or LNG terminals, sufficient storage capacity and multiple buyers of the gas.
"This is very different from a gas ‘transit’ country whereby the gas that is produced elsewhere is simply transported across the territory of the state en route to the final destination. It is not a marketplace for gas," he explained.
He said that for now, Turkey will be a transit country but in the longer term it could evolve to become a regional gas hub.
"If Turkey were to build pipeline infrastructure to bring Kurdish, Cypriot, Russian or Iranian gas to one place and construct sufficient storage capacity to allow trading to take place, it could develop an energy hub of its own, a Turkish gas bazaar, " he noted.
He added that the most likely place for this would be close to the Greek-Turkish border, since EU member states would remain the most likely purchasers of this gas and Europe would also have to develop sufficient import infrastructure and interconnectors to make this work.
"Turkey would benefit economically as it would gain transit and trading fees; the additional infrastructure and import opportunities would help satisfy some of Turkey’s own domestic energy needs; and the creation of a Turkish energy hub would increase the country’s geopolitical relevance. But this is just an idea for now, not reality," he said.