Caspian Report - Issue: 07 - Spring 2014
MUbarIz Hasanov 124 Some Remarks on Economic Benefits of TANAP for Turkey MUbariz Hasanov SENIOR FELLOW, CENTER ON ENERGY AND ECONOMY, HASEN
Projected investment cost of TANAP is around USD 12 billion. Turkish companies are expected to be granted works worth some USD 5-6 billion for supply of pipes and construction works. May 30, 2014 was remarked as an important date in the Turkish energy sector. Turkish national petroleum company TPAO took over Total’s 10% stake in the Shah Deniz Consortium and thus increased total share to 19%. On the same day, Turkey’s national pipeline operator BOTAŞ increased her share in TANAP to 30%. These developments will certainly contribute to Turkey’s long-standing quest to become a regional energy hub and bring significant economic gains. In this note we focus on importance of the TANAP for Turkish energy market and economic benefits of the project for Turkey. Income and Employment Effects of TANAP Projected investment cost of TANAP is around USD 12 billion. Naturally, domestic companies will be involved in implementation of works under this project. Turkish companies are expected to be granted works worth some USD 5-6 billion for supply of pipes and construction works. In addition, according to some estimates about 15.000 direct and tens of thousands of indirect jobs will be created during the construction phase. Furthermore, the project will create permanent direct jobs throughout life of the pipeline. Turkey will also have permanent steam of income from operation of the pipeline as state-owned BOTAŞ holds 30% share in TANAP. Assuming that transmission capacity of TANAP reaches to 31 bcm/year by 2026, total net income of BOTAŞ from operation of the pipeline may reach to USD 17 billion in real terms till the period 2045. These are direct and observable benefits of the project for the Turkish economy. Such a huge infrastructure investment will definitely generate enormous economic activity throughout construction phase and will contribute to permanent economic growth of Turkey in the long run through the multiplier effect. According to our preliminary estimates, the TANAP project may increase gross domestic product (GDP) of Turkey by approximately USD 37 billion by 2029. This implies that GDP of 125 CASPIAN REPORT, SPRING 2014
- Page 76 and 77: Frank Umbach 74 During the last thr
- Page 78 and 79: Frank Umbach 76 approved by the gov
- Page 80 and 81: Shale gas drilling rig. Frank Umbac
- Page 82 and 83: THE IMPORTANCE OF TAP FOR ITALY SOM
- Page 84 and 85: AntonIo SIleo 82 the end of 2011, g
- Page 86 and 87: AntonIo SIleo 84 Power generation o
- Page 88 and 89: ily limited because of the emergenc
- Page 90 and 91: AntonIo SIleo 88 ductant chemical r
- Page 92 and 93: AntonIo SIleo 90 emerge as a signif
- Page 94 and 95: Radu Dudau 92 Romania’s Energy St
- Page 96 and 97: Radu Dudau 94 countries pay for Rus
- Page 98 and 99: Radu Dudau 96 This industry, howeve
- Page 100 and 101: Radu Dudau 98 de facto monopolies i
- Page 102 and 103: Radu Dudau 100 In October 2013, the
- Page 104 and 105: Radu Dudau 102 In spite of the ling
- Page 106 and 107: caspian
- Page 108 and 109: Why World Oil Prices Should Be High
- Page 110 and 111: Luay Al-Khatteeb 108 for $1 of reve
- Page 112 and 113: emın akhundzada 110 Turkey as an E
- Page 114 and 115: emın akhundzada 112 markets. Given
- Page 116 and 117: emın akhundzada 114 First, it shou
- Page 118 and 119: FatIh Ozbay 116 Discussions about V
- Page 120 and 121: FatIh Ozbay 118 The Black Sea is a
- Page 122 and 123: FatIh Ozbay 120 these two countries
- Page 124 and 125: FatIh Ozbay 122 Montreux is quite s
- Page 128 and 129: Turkey will be USD 37 billion highe
MUbarIz Hasanov<br />
124<br />
Some Remarks on<br />
Economic Benefits of<br />
TANAP for Turkey<br />
MUbariz Hasanov<br />
SENIOR FELLOW, CENTER ON ENERGY AND ECONOMY, HASEN
Change language