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Turkey, China ink deal to build Tuz GÃ¶lÃ¼ gas storage

30 November 2011 11:20 (UTC +04:00)

Baku - APA-Economics. Turkey and China on Tuesday signed a deal for the construction of Turkey’s largest underground natural gas storage facility under Tuz GÃ¶lÃ¼ (Lake Tuz) as the need for new such facilities is growing in the gas-dependant country, APA reports quoting Turkish media.

Energy and Natural Resources Minister Taner YÄ±ldÄ±z and Chinese Deputy Minister of Commerce Wang Zhiyuan participated in Tuesday’s signing ceremony in Ankara. Turkey’s need for underground natural gas storage facilities has been an issue of discussion for a long time. According to a natural gas contract signed with Iran in 2003, Turkey has to pay for at least 6.8 billion cubic meters of natural gas annually, regardless of whether it buys that amount, which is 85 percent of the total agreement.

This condition of â€œpay or buyâ€ with Iran -- which is causing significant financial losses to Turkey -- has necessitated the building of underground natural gas storage facilities. Speaking at the event, YÄ±ldÄ±z said Turkey needs to build five or six more gas storage facilities to meet demand. Calling on other Chinese firms to follow and participate in expected future projects in gas storage in Turkey, YÄ±ldÄ±z said the government expects to increase cooperation with China in this regard. The minister remarked that Turkeyâ€™s total energy investment is expected to reach $170 billion according to 2023 plans, while Zhiyuan said this could attract Chinese investors, particularly in the renewable energy sector. The facilityâ€™s annual natural gas storage capacity is anticipated at 1.5 billion cubic meters.

Underlining that natural gas consumption in Turkey has increased in recent years, the minister said such projects are important to maintaining healthy gas distribution throughout the country. There is currently a natural gas storage facility in Ä°stanbulâ€™s Silivri district with a total capacity of 2.1 billion cubic meters. â€œWith the finalization of Tuz GÃ¶lÃ¼ project Turkeyâ€™s total natural gas storage capacity will be 3.6 billion cubic meters. â€¦ This is 10 percent of our total annual natural gas consumption,â€ said the minister. He noted that this level is around 15 percent in developed countries and that Turkey should reach at least 5 billion cubic meters in natural gas storage. Turkey opened a tender for the construction of the Tuz GÃ¶lÃ¼ facility three years ago. The tender attracted American, Austrian, Chinese, Russian and Italian firms, along with leading Turkish conglomerates of the time with the Chinese finally claiming the project. As part of this project 12 separate caverns will be built at a depth of between 1,100-1,400 meters.