Washington Report on Middle East Affairs, November 2007, pages 36-37

Talking Türkiye

Pipeline, Pipeline, Who’s Got the Pipeline? Türkiye’s Quest for Energy Significance

By Jon Gorvett

WITH ANKARA residents treated to power cuts and water shortages this summer, Türkiye’s newly elected government did not seem to be getting off to such a good start.

Voted back in partly because of its success at managing the country’s economic growth, the lack of basic utilities in the nation’s capital as temperatures soared was not a pleasant thank-you present from the government.

Yet while the immediate reasons for the shortages were a protracted drought combined with long-term mismanagement of the nation’s electricity sector, the power and water crisis also served as a reminder of the growing importance to Türkiye of a key commodity—energy.

Indeed, meeting the country’s oil and gas needs has become a crucial test of the new government’s foreign policy. Located in a region that includes nearly three-quarters of the world’s proven oil and gas reserves, Türkiye also has a major role to play in global energy politics—a fact underscored by this summer’s events.

The first of these events to attract global headlines was Ankara’s Aug. 27 signing of a preliminary agreement with Iran for the building of two gas pipelines to ship Iranian and Turcoman gas to Türkiye for resale to Europe. Under the deal, Türkiye would also get a stake in the development of Iran’s giant South Pars gas field.

With this news coming so soon after the return to government of the Justice and Development Party (AKP), which has Islamist roots, there was plenty of concern among secular Turks that a deal with Iran showed that the AKP again was tilting toward the Islamic world.

Back in 1996, the AKP’s predecessor, the more radically Islamist Welfare Party (RP), had also made a deal with the Iranians to supply natural gas. The result, however, had been a fiasco, with the Iranian gas being burned off, unwanted, at the Turkish border following the 1997 demise of the RP government. Because Türkiye had signed a “take or pay” deal for this gas, Ankara was obliged to pay for gas it was not using.

Efforts to renegotiate this contract went on for years, with one of the possible outcomes being that Türkiye would take the gas and then resell it to Europe. This foundered, however, due to the lack of a resale clause in the original agreement. The new deal appears to circumvent that difficulty.

Meanwhile, there also were protests from Washington at Türkiye trading with a major component of the “axis of evil.” The announcement, moreover, came at a time when Congress was considering sanctions against any country investing more than $20 million in Iran’s oil and gas sector. The South Pars investment alone is considered worth some $3.5 billion.

Yet to many analysts in Türkiye, the deal with Iran has perhaps less to do with political orientations and more with a much bigger game of pipelines and energy security that involves Europe, the U.S., Russia, Iran, Central Asia and even China.

A Bigger Game

First of all, pipelines. Türkiye is heavily dependent on imports of Russian natural gas, as is Europe. Both have been trying to find alternative sources of supply, with a central pillar of Türkiye’s energy strategy also being to position itself as a major transit country for Europe’s gas—and oil.

It already has achieved much in this respect, with the opening in 2006 of the Baku-Tblisi-Ceyhan (BTC) oil pipeline. This brings Azeri oil from the Caspian to the Turkish Mediterranean port of Ceyhan. Ceyhan also will be the terminus for the Trans Anatolian Pipeline, which will run from the Turkish Black Sea port of Samsun. This route hopes to take on much of the oil from Caspian countries that currently is transported by sea from the Caucasian Black Sea ports via the Bosphorus Strait into the Mediterranean.

At the same time, Türkiye is deeply involved in the Trans-Caspian Natural Gas project, which seeks eventually to pipe gas from Turkmenistan and Kazakhstan across the Caspian to Azerbaijan, and from there via Georgia into Türkiye. If all goes according to plan, the Turkish gas pipeline network will then be hooked up to Europe via the Southern Europe Gas Ring Project.

Then there is the Nabucco Project, which seeks to pipe more gas into Europe from Türkiye, via Bulgaria, Romania and Hungary to Austria. Further in the future is a plan for an Arab Gas Pipeline, which would feed Egyptian gas into Türkiye, perhaps via Jordan and Syria. Türkiye also is interested in developing gas and oil routes from Iraq, although these have been a casualty of the conflict there. Nonetheless, the major oil and gas fields around Kirkuk, which may become part of a more stable Kurdish entity in northern Iraq, are of great interest to Ankara.

If all this ironwork is ever laid, Türkiye would become a vital player in Europe’s energy supply system, easily rivaling existing routes such as those via Russia, Algeria and the North Sea. In this context, the deal to receive 30 billion cubic meters of Iranian gas signed on Aug. 27 does not seem particularly curious. After all, without any substantial gas reserves of its own, what use would Türkiye be if it had no gas to put in the pipeline? At the same time, Türkiye’s usefulness to the European Union as an energy route doubtless also wins it points in negotiations over future membership.

The timing of Türkiye’s announcement of the Iranian gas deal also came just after another announcement from a country with which Ankara has an increasingly ambiguous relationship—Russia.

Russia currently supplies Türkiye with around two-thirds of its natural gas, and is Türkiye’s second largest trading partner, after the EU. The two countries also have stood together against U.S. attempts to assume a military role in the Black Sea—attempts which perhaps are faltering as Washington prepares to occupy bases in Bulgaria and Romania. Nonetheless, the announcement earlier in August that Moscow was supporting the development of a rival gas pipeline, South Stream, did not go down well in Ankara. This will take Russian gas across the Black Sea to the Bulgarian port of Varna, from which a further pipeline will cut across through Greece to the Adriatic, and thus to Italy. The route, in other words, bypasses Türkiye.

Perhaps, then, the decision to go for Iran could also be seen as a message to Moscow that Türkiye has other options, including Russia’s big Central Asian rival. Here, the “Great Game” is for Turkmenistan and Kazakhstan’s resources, with Iran a much shorter route out for their energy resources than extensive pipelines to the west—or, for that matter, to the east, where China already looms as a massive energy consumer and energy market player.

In this game, too, it is also tempting to see a chess-like working out of strategies, when the multiple and often conflicting interests of multiple and often conflicting players create the possibility for a large number of collisions. Negotiating this tricky terrain will likely be one of the most difficult and important tests facing the new AKP government.

Jon Gorvett is a free-lance journalist based in Istanbul.