ASSESMENT OF NATURAL GAS SUPPLY ...

ASSESMENT OF NATURAL GAS SUPPLY SECURITY FOR TURKEY WITH FUTURE PROJECTION

B. Engin

A. Beril Tuğrul

Istanbul Technical University Energy Institute Istanbul, Turkey [email protected]

Istanbul Technical University Energy Institute Istanbul, Turkey [email protected] hand, industrial development and growth in countries are hardly procured without balanced energy policies.

ABSTRACT Natural gas is one of the key energy resources for Turkey due to fact that 32% of annual primary energy supply and 45% of annual electricity production is obtained from natural gas with also common usage of residential and industrial zones. In this study, the supply security of natural gas was taken into consideration with strategic criteria of energy policy with the SWOT analysis and the future projection for Turkey. It has been concluded on geopolitics criteria, domestic production and research for resources must be stimulated as high as possible and participation to abroad resources must be implemented. A higher ratio of LNG transfer along with natural gas pipelines and an increased capacity of storage must be achieved for more diversity. Likewise, an increment of the number of abroad natural gas suppliers and LNG suppliers must be delivered for better redundant natural gas supply.

Among with the continuously increasing energy demand, new ways to produce energy are being sought. Unconventional energy resources are becoming more significant day by day anyhow conventional energy resources such as oil, gas and coal –in other words fossil resources- still remain dominant on primary energy supply. Problems on accessibility to these dominant conventional energy resources are the most vital topics of global energy policies. In this context, energy supply and demand securities are essential within the energy importing and exporting countries.

Keywords: Energy supply security, Natural gas, SWOT analysis, Future projection, Turkey

2.

Turkey supplies its primary energy demand by mostly imported energy resources. From the point of Turkey’s energy policy, natural gas as a conventional energy resource and natural gas supply security are critical due to portion in primary energy supply and electricity production. NATURAL GAS AS AN ENERGY RESOURCE

2.1. Classification 1.

INTRODUCTION

The global demand on production and thereby the global need of energy is growing with technological improvements, increase on the world’s population, industrialization and uprising trend on societies’ consuming habits. Each country has different trends on energy demand and supply according to their geopolitical and geographical locations, underground reserves, weather conditions and level of industrialization. Some countries are located on very rich underground energy resource reserves but some others are located on very poor locations even though their energy demand is very significant. This disarranged distribution creates a situation such that each country has to have a completely different energy policy and various balances. Not only having rich underground reserves but also being located on energy transportation lines becomes more important in terms of energy policy. Energy industry has impact on all other industries and individual’s daily life. With a balanced energy policy, industrial production capacity and productivity are ensured but on the other

Energy resources can be classified in a number of different topics. In this paper, few ways of classification is used. The first way of classification is to sort as primary and secondary energy resources. If the resource can be used directly in energy production, it is called primary energy resource (coal, oil, natural gas, biomass, etc.); and if it needs to be converted to another form with various processes, it is called secondary energy resource (electricity). The second classification way is sorting as the resource conventional (coal, oil, hydro, nuclear, etc.) or unconventional (solar, wind, geothermal, etc.) energy resources based on their conventionality in deriving energy. Finally, the third way to classify energy resources is to sort as renewable (hydro, wind, solar, etc.) and non-renewable energy (fossil fuels, nuclear etc.) resources [1]. 2.2. Availability and Capacity Factor Availability of an energy resource is significantly critical in order to meet the possible changes in demand and supply energy curves in a short period of time. Considering the dependence of countries on uninterrupted energy usage and production in all industries, an

energy resource which would be available in any time is highly preferred. In energy industry, to express the meaning of availability in terms of numbers and ratios capacity factor can be used [2]. Capacity factor (η) is the ratio of produced electrical energy in a period of time (Pp) and the maximum electrical energy that could be produced in the same period of time (Pmax) [3]. η = Pp/Pmax Capacity factor is a useful ratio to compare power plants using different energy resources. By comparing the capacity factors of power plants with different types of energy resources, the effect of energy resource on a power plant’s energy producing availability can be explained. 2.3. Availability of Natural Gas If comparing the energy resources depending on their availability is needed, renewable and non-renewable energy resources classification can be used to detect the difference easily. In general, it can be asserted that the non-renewable energy resources derive more availability on power plants than renewable energy resources (excluding geothermal and biomass) due to their independence to outside conditions such as weather, wind speed, etc. On the other hand, non-renewable power plants are available to produce energy if the required fuel is supplied and no maintenance is in occasion. Nuclear power plants has the highest ratio of capacity factor usually around 90% [4], which is followed by coal and natural gas power plants.

Figure 1. Distribution of Proven Natural Gas Reserves in 2001 [5] As the global natural gas reserves are concentrated highly on few regions, Russia has the biggest slice with 23% of global reserves [6]. Iran, Qatar and Turkmenistan have total of 40% of global natural gas. In another words, 63% of global natural gas reserves is belong to only four countries.

Natural gas fired power plants have high availability on electricity producing as well as their fast start-up responses such as 2-3 hours (excluding heavy duty natural gas turbines). Quick start-up feature is highly advantageous to supply needed electricity production in the peak load cases. 2.4. Natural Gas in Global Energy Policies Not only its convenience in electricity production but also its common usage in residential heating and industrial processes, natural gas is indispensable for many countries. Even though its widespread usage on the globe, natural gas reserves are located to a narrower area by nature. The distribution of natural gas reserves over the regions in the world is shown in the Figure 1.

Figure 2. Natural Gas Consumption Percentage over Global Consumption [6] Different from global reserves distribution, natural gas consumption is distributed among the developed and developing countries. As shown in the Figure 2, other than United States and Russia, global distribution of natural gas is close to even among other countries. This unbalanced situation on natural gas demand and supply amounts puts natural gas and natural gas supplier countries in a very strategic position among the global energy policies.

Figure 3. Natural Gas LNG and Pipeline Transportation Ratio [7] Additional to suppliers, the countries which are located on the natural gas transportation lines are gaining strategic advantage as the global natural gas trading is enlarging. Countries located between natural gas suppliers and demander countries have the most advantage on this aspect by hosting many pipelines and LNG terminals on their territory.

Figure 5. World Electricity Generation Projection by Fuel (Quadrillion BTUs) [8] 3.

SUPPLY SECURITY

3.1. Definition Supply security term is integrated to energy security concept which means sustainable availability of energy in different forms, with enough amounts and financially affordable prices [9]. Energy security concept can be examined in three subtopics: supply and demand security, substructure security and weather conditions.

Figure 4. World Electricity Generation by Fuel (GWh) [7] Natural gas is an essential energy resource in electricity production with coal, nuclear and hydro energy resources. On the Figure 4, it can be seen that natural gas’s percentage in global electricity production has been in high levels for many years and according to the projections in Figure 5 it will be more essential in next 30 years.

In energy or energy resource trading countries, if that specific resource’s the domestic production amount is greater than the domestic consumption amount, demand security would be in focus due to sustainability of exporting. If the domestic production amount is fewer than the domestic consumption amount, then the supply security would be studied in order to sustain the resource supply. Demand Security: Production > Consumption Supply Security: Production < Consumption Since Turkey is one of the natural gas importer countries in the global market, investigating the supply security of natural gas would be more consequential. The term of supply security might have different meanings according to the related country’s development level. Developed countries might need sustainability more than affordable gas prices as a result of their industrial production high capacity. Even a short period of time power loss in the developed industries would cost tremendous failures in production, which would have more effect than buying the natural gas from a higher price. On the contrary, in developing countries natural gas buying price might be essential to distinguish the supplier due to sensitive financial conditions and short energy blackout would be tolerable.

In a country’s energy policy, supply security risks might be separated as short term and long terms supply risks. Short term supply security contains the risks which might cause interruption of supply for hours or few days such as political weakness, extraordinary weather conditions or technical substructure problems. Long term supply security contains the risks which might cause not particularly a cut of resource supply, but problems in demand/supply balances, financially and political bottlenecks.

3.2.2.

Another sorting on supply security can be made as internal and external supply security terms. Internal supply security is related to the country’s internal affairs, controlled and audited by state’s institutions and ministries. It consists supplying the continuously and affordable natural gas among the domestic importer, producer companies and end customers. External supply security is a matter of foreign affairs of the country and it is related to the country’s international policies, agreements, geopolitical location and status. As a result, internal supply security is more manageable comparing to external supply security.

3.2.3.

Natural gas supply security is an international topic and it affects on global energy and security policies. In normal conditions, none of the countries are completely free to make a decision by their own on the natural gas market and any abrupt movements might cause bureaucratic enforcements, embargos or even wars. 3.2. Strategic Criteria for Natural Gas Supply Security To ensure natural gas supply security, each country has to have its own strategic criteria as terms of energy policy according to their natural gas supply status. Strategic criteria can be examined in three separate topics: Geopolitical, redundancy and diversity. Fulfilling these strategic criteria provides sustainable natural gas supply and consistent natural gas price policy. 3.2.1.

Geopolitics Criteria

Redundancy Criteria

Redundancy criteria checks if the country’s natural gas supply dependence is distributed on many suppliers, so that the risk of being dependent on a single supplier and having less control in the importing agreements is reduced. Regarding to redundancy criteria, natural gas supplier number should be maximum and percentage of each supplier should not be dominant to the others, as long as it is possible technically and financially. Diversity Criteria

Obtaining natural gas from various ways is the main point of diversity criteria. Getting the natural gas only with pipelines makes the country depended on pipelines’ technical and operational status. In any case of technical problems, sabotage or political crisis on pipelines, would put the country in a position where there is no alternative way to access natural gas. Using alternative ways for natural gas trading such as LNG and having enough stored capacity of at least 30-40% of annual natural gas usage would reduce the risk. Investing on LNG terminals, increasing the capacity of LNG transfer and investing on natural gas storage facilities should be done regarding to diversity criteria. 4.

NATURAL GAS IN TURKEY

Natural gas usage in Turkey has started in 1970s. First natural gas reserves discovered in Hamitabat and Kumrular locations in 1970 and in 1976, first natural gas has been used by a cement plant. The real expansion of natural gas usage in Turkey is obtained in order to reduce air pollution in big cities. In 1980s, natural gas has been started to use as residential heating fuel in Ankara, Istanbul, Bursa, Izmit and Eskisehir. In 1986, the first international natural gas importing contract between Russia and Turkey via pipelines has been done [10]. Natural gas pipelines connections with LNG terminals in Turkey are shown in the Figure 6.

Each country has a different geopolitical situation on each different subject such as energy, national security, tourism, etc. In the energy and, particularly in this paper, natural gas supply security aspects, each country has to evaluate its own natural gas status. The need and demand, dependability on natural gas, domestic reserves and production, distance to global natural gas reserves and trade ways, relationships with the neighborhood countries, relationships with other natural gas importer and exporter countries are notably important on geopolitics criteria. As geopolitics criteria, countries should check: Having any secured natural gas resources in their territory Having an access to the secured natural gas resources According to the results of these two strategic criteria, the country should assure the followings: Minimizing the dependence of foreign natural gas suppliers, maximizing the domestic natural gas production Guaranteeing continuous the natural gas supply within international policies and agreements

Figure 6. Natural Gas Pipelines and LNG Terminals in Turkey [11] 4.1. Production According to the Figure 7, Turkey has very limited natural gas reserves. First production has started in 1976 and it has been rising since then but as a result of lack of natural gas reserves in the country, domestic production is very low (Figure 8) comparing to domestic consumption. Even though researches for new reserves are continuing, most of the new

natural gas reserves are not commercial for today’s market conditions.

natural gas from number countries. Natural gas importing via pipelines is proceed from Russia, Iran and Azerbaijan. Turkey also has a natural gas importing contract with Turkmenistan but the gas transfer has never started practically [10]. Natural gas importing as LNG is proceed from Algeria, Nigeria and as spot buying. Turkey’s natural gas import values based on years and supplier countries is shown in Figure 10.

Figure 7. Natural Gas Reserves of Turkey between 2009-2012 (Billion m3) [12]

Figure 10. Natural Gas Import of Turkey Based on Years and Countries (Million Cm3) [10] [11] [13] Including imported natural gas and domestic production volumes, total volumes of natural gas supply in Turkey between the years 1999-2012 are given in Table 1. This table gives an overall view to Turkey’s natural gas supply trend in the last 14 years and makes it easier to make a projection for the next years. Figure 8. Natural Gas Production of Turkey Based on Years (Thousand Toe) [10] [12] 4.2. Import and Export Using natural gas in residential areas as heating fuel and its convenient usage in electricity production have leaded an impact of natural gas usage in Turkey. However, the low capacity of domestic natural gas production was never able to meet the demand, so the importing natural gas from international suppliers has been increased (Figure 9).

Year Volume 1999 12309 2000 14570 2001 16093 2002 17328 2003 20829 2004 21797 2005 26571 2006 30221 2007 35842 2008 37350 2009 35856 2010 34957 2011 43875 2012 45922 Table 1. Total Volumes of Natural Gas Supply in Turkey Based on Years (Million Cm3) [10] [11] [13] [14]

Figure 9. Total Natural Gas Import of Turkey Based on Years (Million Sm3) [10] [11] [13] Having most of the biggest natural gas producer countries in neighborhood territories as an advantage, Turkey imports its

The advantage of being in the middle of natural gas supplier and consumer countries is opportunity to host pipeline projects to go through the land for Turkey. In this aspect, Turkey exports natural gas to its western neighborhood countries since 2007 [11]. Few companies have natural gas exporting contracts with Greece and Bulgaria [10]. Total values of natural gas exports in Turkey are shown in Figure 11.

Figure 11. Total Natural Gas Export of Turkey Based on Years (Thousand Toe) [10] [11] 4.3. LNG Buying natural gas as liquid with LNG tank ships is carried out in LNG terminals. LNG transfer provides a flexibility on natural gas supply because of it unneccassary to build pipelines for each supplier country. Also being able to buy LNG from various suppliers with one time contracts (spot LNG) is an advantage in cases of natural gas supply problems. Turkey has two LNG terminals (Marmara Ereğlisi and Aliağa) with total capacity of 12 billion m3 per year [10]. LNG import values of Turkey based on years and countries are shown in Figure 12.

Figure 13. Percentage of LNG Imports in Turkey Based on Years (%) [10] [11] [13] 4.4. Consumption Natural gas is very convenient to use both in electricity production and residential heating. Natural gas fired power plants have quicker installation and commissioning period comparing to most of other fueled power plants. Additionally, short start-up time intervals make natural gas power plants more favorable in fast developing countries like Turkey, which need fast response to quickly changing energy demands. Using natural gas in residential areas is a luxury, firstly because of its price. Natural gas is relatively cheaper than other residential heating solutions considering its easy access and distribution to the end customers. Furthermore, natural gas is more environment friendly with low carbon emission values. These advantages made natural gas is widely used in Turkey, in most of the cities. It is also used in industrial heating processes as fuel.

Figure 12. Total Values of LNG Imports in Turkey Based on Years (Million Cm3) [10] [11] [13] As shown in Figure 12, Turkey’s LNG transfer values are increased by years caused by increasing natural gas usage and import in Turkey. However, by reason of total increase in natural imports via pipelines LNG transfer percentage over total natural gas import is remaining lower as shown in Figure 13. Figure 14. Natural Gas Consumption Areas in Turkey (%) [15] Figure 14 shows that half of the natural gas consumption is used in electricity production in power plants. The other half of natural gas consumption is shared by industrial and residential use evenly. Also in Figure 15 and Figure 16, natural gas’s slice in total primary energy supply and electricity production in Turkey can be seen. From 1980s to 2010s, natural gas as electricity production process fuel is grown up and with 2011’s values, 45% of Turkey’s electricity is produced with natural gas [14].

Figure 15. Primary Energy Supply in Turkey Based on Resources and Years (Thousand Toe) [14] Figure 17. Scheme of SWOT Analysis SWOT analysis can be used almost in any situation to make a decision if a goal is determined. In this paper, SWOT analysis is used to evaluate Turkey’s natural gas supply security. 5.2. SWOT Analysis of Natural Gas Supply Security for Turkey Considering the facts of Turkey’s geographical and geopolitical position and natural gas usage in the country, SWOT analysis table of strengths, weaknesses, opportunities and threats in the aspect of natural gas supply security for Turkey can be listed as shown in Table 2 [18]. Figure 16. Electricity Production in Turkey Based on Resources and Years (GWh) [14] 5.

SWOT ANALYSIS

5.1. Principles of SWOT Analysis SWOT Analysis is a tool in order to appraise the Strengths, Weaknesses, Opportunities and Threats in a project or decision making with a strategic approach. It includes determining the goal of the project or decision making with diagnosing the internal and external factors which are supportive and unsupportive to succeeding that goal [16]. To achieve an effective SWOT analysis and get competitive benefits of each category (strengths, weaknesses, opportunities and threats) users has to ask and answer meaning questions [17]. The scheme of SWOT analysis can be seen in Figure 17.

 STRENGTHS  • Positioning between producing and consuming countries • Hosting few pipelines and LNG terminals • Having few alternatives for domestic supply • Already made long term trading agreements

 WEAKNESSES  • Lack of reserves and production • Proportion on electricity production • Dependency on residential usage • Dependency to Russia for supply

 OPPORTUNITIES  • Increase of Turkey's role on regional politics • Hosting new pipeline projects • New trading agreements with producing countries • Political progresses in the southern neighborhood region

 THREATS  • Increase in global natural gas prices • Regional crises between trading countries • Environmental obligations • Rising trend of domestic consumption • Alternative pipeline routes bypassing Turkey

Table 2. SWOT Analysis Table of Natural Gas Supply Security for Turkey

5.2.1.

Strengths

Turkey is located on a significant position between the countries which have rich reserves of natural gas and consuming high ratios of natural gas. On the east side of Turkey, few of the world’s most natural gas producing countries are located such as Russia, Iran and Azerbaijan [6]. On the other side, the west, European Union countries are located in the middle range. This mapping creates a geopolitical advantage for Turkey about natural gas supply policies and trade traffic [19]. Due to the geographical position, being a connection point of two continents and surrounded with seas from three sides, Turkey hosts few international natural gas pipelines and LNG terminals in its territory [10]. Hosting many natural gas pipelines and terminals gives a technical advantage to Turkey about natural gas supply variety with different natural transfer lines.

between the countries. This kind of situation would be an opportunity for supplying natural gas with better terms and robust agreements. According to projections, natural gas will become more common globally in electricity production [8]. With the increasing amount of global natural gas trades, new pipeline project will come into question. Being a hosting country to new international natural gas pipeline projects in the future is an opportunity for Turkey’s natural gas supply security both geopolitically and technically. New natural gas buying agreements with new and already exporting countries would secure natural gas supply for Turkey as both diversity and redundancy criteria. With more capacity of LNG transferring, new agreements with LNG exporting countries can be done.

Having already made long term natural gas agreements is significantly important in terms of supply security. These long term agreements lead to international pipeline projects with big investments and the sustainability of natural gas transfer is secured by terms of each agreement.

Political progresses in the southern neighborhood of Turkey including Northern Iraq, Syria, Cyprus and Israel are critical for global energy politics. Any possible changes in the regional balances might affect not only neighborhood countries but also many natural gas and oil trading ones. The progresses in Northern Iraq would increase the importance of Turkey in energy politics and may cause another natural gas transfer line from that direction. Also with new natural gas fields in Mediterranean Sea with Cyprus and Israel connections would put Turkey in a critical position with the possibility of hosting new pipelines. These possible progresses are opportunity to supply natural gas from more resources.

5.2.2.

5.2.4.

To supply natural gas for the domestic usage in Turkey, being in the neighborhood area of big natural gas exporter countries provide an advantage. Due to short distances and direct natural gas pipeline connections with long term agreements, the costs of natural gas import is cheaper than buying other countries.

Weaknesses

As shown in Figure 7 and 8, Turkey has very limited natural gas production because of lack of reserves. Low domestic natural gas production puts Turkey in a situation where the most of natural gas demand need to be exported continuously. Lack of natural gas reserves is a weakness in order to supply enough amounts. Natural gas has a very big proportion in Turkey’s electricity production. 45% of electricity production in Turkey is produced by natural gas fired power plants [14]. This dependency to natural gas in domestic power generation is a weakness on natural gas supply security as the redundancy criteria of supply security. Increasing common usage of natural gas in residential areas mainly as a heating resource created a dependency on natural gas starting from mid 1980s [14]. In today’s conditions, natural gas is indispensable and almost unique because of its ease to use and less environmental effects. According to Figure 10, Russia has the biggest proportion among the countries exporting natural gas to Turkey with 58% of ratio [10] [11] [13]. Despite the variety of many supplier countries, dependency on one of them with this high ratio of export is creating a risk in terms of supply security. 5.2.3.

Opportunities

With the changing political balances in the Middle Eastern region, the possibility of gaining importance for Turkey in regional politics might affect the energy balances and agreements

Threats

An increase in global natural gas prices is a threat for Turkey’s natural gas supply because of rising costs for natural gas usage. With the high dependency to natural gas on electricity production and common residential usage, a rise in the costs would affect almost all sections of society and disrupt the demand curves of natural gas. Any possible regional crises between natural gas importing and exporting countries are threat to Turkey’s natural gas supply. In case of interruption in transfer from one of the supplier countries (in worst case Russia), Turkey have the risk of domestic natural gas shortage for short or long term. International environmental obligations on countries’ carbon emissions are threat for natural gas usage. In the event of more restricted environmental rules, Turkey may need to decrease its carbon emission and by cause of percentage on power generation natural gas would take its share of this reduction. With development in Turkey’s industry level and expanding use of natural gas in residents would boost the domestic natural gas consumption. Rising trend of domestic consumption of natural gas would increase Turkey’s dependency on natural gas and its suppliers. This would be a threat, create a pressure on national authorities for supplying enough amounts and diminish flexibilities on natural gas supply balances. Any alternative pipeline projects bypassing Turkey from natural gas suppliers to demanders is a threat to Turkey’s natural gas

supply security. In this case, the total amount of natural gas passing on Turkey would decrease and geopolitically, Turkey would lose it significance on natural gas policies. 5.3. SWOT Analysis Strategies of Natural Gas Supply Security for Turkey

Balancing the dependency among natural gas supplier countries for Turkey is possible with not only increasing the transfer capacity of natural gas but also adding new countries to natural gas import agreements. With this approach, redundancy criteria of supply security would be satisfied. 5.3.3.

Threat-Strength (TS) Strategies

Regarding the topics of SWOT analysis strengths, weaknesses, opportunities and threats some strategies can be made for supply security of Turkey’s natural gas (Table 3). Opportunity-strength (OS) strategies use strengths to take advantage of opportunities. Opportunity-weakness (OW) strategies try to overcome weaknesses by taking advantage of opportunities. Threat-strength (TS) strategies use strengths to avoid threats and threat-weakness (TW) strategies try to minimize weaknesses and avoid threats.

Eliminating the risk of changing natural gas market prices may not be possible due to integrated global energy policies but with improved terms in import and export agreements would minimize the price peaks and wide oscillations. Determining the rules of agreements between the two (importing and exporting countries) might absorb the effects of global market price changes during the agreement years.

Opportunity-Strength (OS) Opportunity-Weaknesses Strategies (OW) Strategies • Increasing the import • R&D investments for natural capacity with more gas drills agreements

Enhanced relations with regional countries would also lower the risk of any political crisis in the regions. By the help of Ministry of Foreign Affairs and personal contacts between authorities and businessmen, stronger relations can be ensured which would increase the security of natural gas supply.

• Investing on pipeline and LNG terminal projects

• Agreements with new countries

5.3.4.

Threat-Strength (TS) Strategies • Improving the terms in agreements

Threat-Weaknesses (TW) Strategies • Balancing and restricting arrangements on electricity production with natural gas

• Developing relations with region countries

• Preparing more environmental usage of natural gas • Using the demand security importance for supplier countries

Table 3. SWOT Analysis Strategies Table of Natural Gas Supply Security for Turkey 5.3.1.

Opportunity-Strength (OS) Strategies

By using the advantage of positioning nearby few natural gas importing countries, increasing import capacity with making more long term agreements would help the security of natural gas supply as long as the agreements are valid. Investing on pipeline construction technologies to lower costs and building more LNG terminals to be able to develop LNG trading with bigger capacities would also help the supply security by making new agreements easier. 5.3.2.

Threat-Weaknesses (TW) Strategies

Turkey’s dependency on natural gas in power generation and residential usage is a weakness and causes many threats on supply security of natural gas. In order to lessen the dependency on natural gas, usage of it in power generation can be limited or restricted to stop increasing trends. Encouraging investors to other sources of energy in power generation and making laws to restrict or limit building new natural gas power plants is essential on this aspect. With global warning and other environmental topics, obligations to reduce carbon emission in countries are on the agenda of each participating countries’ energy industry because of its effects to the nature. New local laws aiming to decrease and limit carbon emissions are expected to be introduced to the domestic power generation industry in long term. To prevent or lessen any big compulsive environmental obligations in the future, laws which are setting rules to lower environmental effects for the new power plants projects must be set. The advantage of being an imported natural gas depended country is having a role on supplier countries’ demand security. Turkey is a natural gas importer country with big amounts and this weakness can be used to minimize the threats of any supply security problems. Foreign energy policies on natural gas which are aiming to balance relations with supplier countries should be applied in this order.

Opportunity-Weaknesses (OW) Strategies 6.

To increase proven natural gas reserves and domestic production, research & development investments on drilling and such technologies should be made. With better technology and improvements on drilling would decrease the natural gas reserve searching costs and make already found resources more competitive.

FUTURE PROJECTION

To inspect Turkey’s natural gas supply security in long term, a future projection could be useful to have a strategic foresight. In order to make a future projection about natural gas supply of Turkey, obtained data can be used to have a mathematical ground for the projection. In this aspect, Turkey’s total natural gas supply volumes for the last 14 years in Table 1 are used. Taking into account the values in Table 1, the simple linear regression method

is used to make a projection of natural gas supply of Turkey for the next 10 years [20]. To accomplish this, all obtained values are placed on a table in Microsoft Excel 2010 software and the software’s “trendline feature” is utilized [21].

With the aspect of strategic criteria of supply security and considering SWOT analysis strategies, there are few suggestions to improve supply security of natural gas for Turkey. In terms of geopolitical criteria, investing in domestic production on natural gas and more research to find new reserves should be done. Preferring unconventional domestic reserves should be induced. Additionally, becoming a partner of foreign natural gas reserves and LNG terminals is advised to lessen costs of exporting. In terms of redundancy criteria of supply security, adding new countries to the natural gas suppliers to Turkey with new agreements not only with pipeline connections but also with LNG transfers would depreciate the dependency to Russia. Along with the new countries and agreements, upgrading the capacity of already made natural gas pipeline connections may reduce the risk of redundancy.

Figure 18. Turkey’s Natural Gas Supply Projection (Million m 3) The regression line (trendline), its mathematical equation and the coefficient of determination (R 2) are shown in Figure 18. From the regression equation shown in Figure 18, the calculated values of Turkey’s natural gas supply future projection volumes are given in Table 4. Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Volume 47678 50287 52896 55505 58115 60724 63333 65942 68552 71161 73770

Table 4. Turkey’s Natural Gas Supply Projection (Million m3) 7.

CONCLUSIONS

As a result of Turkey’s present energy industry conditions, energy policies and natural gas proportion in this, natural gas is significantly critical for the country by cause of its ratio in power generation and widespread usage in residential areas. Natural gas reserves and domestic production values in Turkey are fairly low comparing to total consumption. To supply the enough amount of natural gas to domestic users, Turkey is exporting approximately 98% of its natural gas with 58% of it from Russia [10] [11] [13]. In addition, considering the projection of Turkey’s natural gas supply for the next 10 years (Figure 18), it can be said that the dependency on natural gas is not going to reduce in the near future. With the correct strategic decisions, the rising share of natural gas -especially in electricity production- in Turkey might be prevented but not easily diminished.

Concerning the diversity criteria of natural gas supply security in Turkey, addiction to pipeline gas imports should be degraded. The ratio of LNG export amounts over pipeline gas should be expanded with building new LNG terminals and increasing the LNG exporting capacity. Furthermore, natural gas storage capacity must be maximized to be able to suppress any shortage of export natural gas supply. As the conclude of the study, it can be said that the natural gas usage is preferable, if the supply security could be providing the natural gas source with redundancy of connecting by different countries and with diversity of increasing LNG usage and also with storage capacity of them. Therefore, enough number secure natural gas suppliers and increasing LNG terminals and storage places have vital importance for supply security of Turkey. 8.

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