Caspian Report - Issue: 07 - Spring 2014

Natural gas dependency in Europe is
increasing rapidly. According to current
estimates, the natural gas dependency of
the EU and Turkey is expected to increase
significantly over the coming years.
Turkey is located between the Middle
East and the Caspian Region
on the East, which hold 75% of the
world oil and natural gas resources,
and the European Union on the West,
which is the largest consumer of
these reserves. This strategic location
provides crucial advantages to
Turkey. Ankara is building on this
natural advantage by bringing supply
and demand together through its
unique geostrategic location.
Natural gas dependency in Europe is
increasing rapidly. According to current
estimates, the natural gas dependency
of the EU and Turkey is expected
to increase significantly over
the coming years. Given the increasing
demand for natural gas together
with decreasing domestic production,
experts predict that Europe will
need to import 80% of its natural
gas by 2030, compared to 64% today.
Europe urgently needs to locate alternative
sources and suppliers, and
it is here that Turkey can take on a
key role. If Turkey can effectively utilize
its position, it stands to become
a major European energy hub. One
component of being an energy hub
is having a sufficient energy supply.
Turkey is lucky in this regard. If it implements
the right energy policies, it
can ensure around 100 billion cubic
meters of natural gas inflow within
ten years, which would transform
Turkey into an energy hub.
So, where can Turkey obtain this volume
of natural gas
Azerbaijan: Azerbaijan holds
around 3.2 trillion cubic meters of
proven natural gas reserves, and
7 trillion cubic meters of potential
reserves. Azerbaijan is one of Turkey’s
main political and economic
partners in the region, and Baku’s investments
in Turkey are expected to
reach 20 billion USD by 2019. Azerbaijan
has been exporting 6.6 billion
cubic metres per annum (bcm/a)
from Phase I of its giant Shah Deniz
gas field through the Baku-Tbilisi-
Erzurum pipeline since 2007.
As part of the Shah Deniz Phase II
Project, 16 bcm/a natural gas will be
exported through TANAP, of which
6 bcm/a will remain in Turkey and
the rest will be sold to European
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CASPIAN REPORT, SPRING 2014