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Turkey: Plans Made For Massive Gas Purchases

A Turkish energy expert says his country plans to undertake large purchases of natural gas. The expert says potential suppliers include Russia, Iran, Turkmenistan, Azerbaijan, and Iraq. Correspondent Michael Lelyveld reports.

Boston, 14 August 2000 (RFE/RL) -- A Turkish energy expert says his country has agreed to buy nearly twice as much gas as it needs, underscoring concerns that the race to supply Turkey may be out of control.

Ferruh Demirmen, an oil industry consultant, told the Turkish Daily News last week that Turkey has agreed to buy 107 billion cubic meters annually by 2010, compared with government forecasts that demand will be 55 billion cubic meters 10 years from now.

Demirmen cited plans to buy gas from a long list of countries, including Russia, Iran, Turkmenistan, Azerbaijan, Egypt, Iraq, Algeria, Nigeria, Yemen, and Balkan nations.

He said, "While some of these plans may be dropped, there are other pledges which cannot be broken."

When asked why Turkey plans to buy gas from so many countries, Demirmen answered, "It is natural that gas is purchased from a variety of locations for security reasons. But there is no sense in buying extra gas. I have asked many people why we are purchasing so much gas, but I haven't been given an answer. The question should be directed at the political leadership."

Turkish officials have repeatedly denied that the country's agreements will give it more gas than it can use. But Western analysts, including World Bank officials, have estimated that Turkey's needs will fall far short of the government forecasts, perhaps reaching 30 billion cubic meters in 2010. If that is the case, Turkish plans may be for more than triple the amount of necessary imports.

The issue is critical because Caspian countries and other nations are counting on gas sales to Turkey for the future of their economies. Russia and Iran are also depending on Turkish growth to justify big investments in pipeline projects. If the supplies exceed demand, some of the projects could fail.

But rather than cutting its estimates, Ankara may be making an even greater push for gas. After a decision last month to cancel a tender for its first nuclear power plant, Turkey reportedly is studying plans to rely even more heavily on conventional fuels.

An agreement last month between Turkey and Greece to work toward connecting their gas networks offers hope that Ankara will be able to export some of its excess fuel to Europe, if it winds up with too much. But the pact, which resulted from a sudden thaw in relations after Turkey's earthquake last year, does not explain why Ankara previously pursued a strategy of seeking so much gas for so long.

Turkey appears to have invested heavily in its own expectations of rapid economic growth. Domestic political pressures and current electricity shortages have contributed to the shopping spree for gas contracts. But the forecasts have also helped to enhance Turkey's position as a focal point for the regional policies of nations of the east and west, as well as the Middle East.

In an interview with The Associated Press in February, Turkish Foreign Minister Ismail Cem stressed the importance of the country's image as a crossroads between Europe and the countries of Central Asia and the Caucasus.

Speaking after Turkey's designation as a candidate for European Union membership, Cem said, "This has been the historical role of Turkey, but now it is reconfirmed, and it is much more important than it used to be."

Turkey may receive many benefits by serving not only as the destination for Caspian exports but as a gateway to the region's riches. Its Turkic ties give it links to both sides of the Caspian, no matter how far the sources of energy are removed.

Although doubts have been raised for several years about Turkey's ambitious forecasts, none of the Caspian countries has seriously considered the consequences if Ankara's predictions prove wrong. This is perhaps because of the political yearning to be connected to Turkey as an alternative to Russia.

In some sense, Caspian countries may have come to feel Turkey's hopes for a future as a modern nation and an EU member as their own. This sense may keep them from questioning Turkey's ability to absorb all of the gas they can produce.

There is also an assumption that Turkey will choose to buy gas from Turkic-language nations, even though it has already signed binding contracts with Russia and Iran. But it seems unlikely that Turkey will have room for both Azerbaijani and Turkmen gas, if it honors those pacts.

It may matter little to the Caspian countries whether their gas goes to Turkey or through it to Europe. But with uncertainty over EU efforts to liberalize its gas markets, new Caspian supplies could find few places to go. Countries like Germany, which have supply contracts with Russia, have been dragging their feet over the EU directive to open their markets this year.

The problems suggest that there will soon be big losers among the Caspian competitors in the race to supply gas. Their faith in Ankara may be limitless, but Turkey's gas market is not.