Energy Minister Yildiz: We are ready to open the energy chapter, but the EU is not

“We are ready to open the energy chapter, but the EU is not. Given that Turkey is part of the solution to secure the supply of natural gas for EU countries, as in the Nabucco project, how can it not open the chapter on energy?” he asked, speaking to Today’s Zaman.

Noting that much of the opposition has come from the Greek Cypriot administration, Yıldız said: “I think we do not deserve such treatment. They tell us that we need time. We do not approve of this. Given our contributions to the projects, how can one say that we need time? Turkey does not deserve this. I believe that we perform better in energy than most nations.”

Yıldız pointed out that Turkey’s rapid growth will continue within the framework of their 2023 projections and that they will continue to provide the energy needed for this growth without interruption. Underlining their resolution to make use of all available energy resources, the energy minister stated that they are not open to suggestions that they prefer a particular form of energy over others. Recalling that the demand for energy will double in 2020, he said that this means the government must invest as much $120 billion in transmission, distribution and production.

Yıldız answered our questions as follows:

There were some criticisms raised concerning the Nabucco project. What is the exact position of Turkey? What does it give and take?

Such projects are medium or long-term projects. We need to define them properly. They are extraordinary projects, not a piece of cake. We need to concentrate on the long run and be patient. We need to show great care and produce synergy. Certain threats face any big project. For example, let us refresh our memory and go back 18 years when the Baku-Tbilisi-Ceyhan oil pipeline was being built. Many people did not believe in the practicability of that project, but it was ultimately completed. Similarly, the current project, too, has difficulties, particularly concerning the price. You cannot say, “Let’s do it right now,” if you are talking about a project worth 7-8 billion euros. It is certainly not a walk in the park. It has problems concerning financing, construction, coordination, resources, routes, etc. However, even difficult tasks can be achieved. We believe that we can make it even if it is very hard to implement.

An intergovernmental agreement was drafted, and it got the go-ahead from Parliament. Currently, the work on the Project Support Agreement (PSA) is thankfully about to finish, and soon, it will be signed. It has separate stages.

What can you say about Turkey’s gains?

Turkey will have huge gains. First of all, it will add another plan to its list of projects from which it derives benefits stemming from its own geography. Nabucco will be a strategic project that will carry 31 billion cubic meters of natural gas per year, connecting suppliers with consumers. We have to do this. I attach special importance to this. Its benefits will include additional employment opportunities and taxation and Turkey’s income during the operation and investment period.

It seems there is no agreement with Iran concerning the South Pars area?

In our previous statements, we had said that technical negotiations were continuing. We were asked whether the recent sanctions would affect us. First of all, we need to clarify whether we will agree on technical issues. Then, we can talk about administrative issues. From the technical standpoint, we could not agree on the modeling system or how to share duties and responsibilities. We explained that we might evaluate a new and different proposal, but that we would not make any moves concerning the South Pars area given the current state of affairs. The project should create common ground for the benefit of both Turkey and Iran.

Do the recent US sanctions have any impact?

No, the matter is purely of a technical nature.

When will investment in nuclear energy start? How will it be delivered?

In my opinion, the Republican People’s Party’s (CHP) taking us to the Constitutional Court [on this matter] will come as no surprise to us. I think we will not come to that point. Otherwise, it would not be possible to do anything in Turkey. However, I am of the opinion that things will not amount to that. It is a big project. We are at an important point in Turkey’s goal of having nuclear plants. Of course, such great projects will face great opposition. But we are resolved to go our own way. We intend to continue with such project because Turkey has earned the right to. I do not think we will see any problems with the business we will do with Russia.

What is the process?

First, there will be some work for licensing that we must do. There is a one-and-a-half-year preparation period; designs and necessary permits must be prepared. Time is needed for this. Then come seven years for investment. We are talking about a process that may continue until 2020 or 2023. We need to be patient.

Can you give a start date?

Investment may start in one-and-a-half years (late 2011 or early 2012). There is a seven-year construction period. Overall, the project may extend to 2018 or 2019.

There were disruptions in the tender process. In the negotiations being conducted with Russia, local production or the South Korean model for Turkey is being stressed.

What does technology transfer imply?

We believe we will take what we can do. This is already framed in the agreement. If we can do 60 percent, we will do it. It depends on what services we can provide. If we can do it, the project company will take over the business. It has to do with our capabilities and organization. We are the key. If can do 100 percent of it, we will go local 100 percent. But now we are not able to do that.

There were talks with the South Korean KEPCO for the nuclear business. Is there a slowdown?

Let us not call it a slowdown, but we hope that they will be completed by the end of the month and that we can reach an agreement. Currently, there is no agreement. Talks are under way, and I hope we can reach a settlement. Yet, if we can’t, this is not the end of the world. We can talk with another company.

Do you give priority to the third generation (3G) technology?

The 3G is the most advanced and applicable form of technology.

What will be your fuel strategy?

There are five countries that enrich uranium, but there are many fuel factories. Turkey will not have a problem in this matter. It is not feasible to invest in fuel before having a certain number of nuclear units. We’re just starting, and there is already a suitable venue for obtaining our fuel supply.

Weren’t there plans to consider locations other than Mersin and Sinop?

Yes, there are other locations, but it is too early to talk about them. First and foremost, we have to implement these two big projects.

Some claim that we will suffer certain difficulties in meeting energy demand until the nuclear power plants are commissioned.

No, this is certainly not the case. We do not foresee a period characterized by problems related to these investments. We will start to use nuclear energy after 2018 and 2019. We have also have several investments to make during this span of time, and our work on them is under way. We will continue to invest in water, wind, geothermal and coal-based energy.

You are being criticized as well?

I think the campaigns against these energy investments are being exaggerated. Energy, too, is an asset for Turkey like tourism, agriculture and forests. All of them are our assets. We cannot isolate or distinguish one from the others.

What is the current state of the Kirkuk-Yumurtalık pipeline?

The agreement expired, and we are working to renew it. If we find an opportunity to go to Baghdad in the coming days, we will work out the agreement.

Will there be a capacity increase?

We will start with 35 million tons and go up to 70 million tons in three years.

What will Turkey’s annual revenue be? Will terrorist attacks against it be prevented?

I think Turkey’s total annual revenue, including the storage tanks, will be about TL 1 billion. As for its security, we believe that extra protection should be provided to the pipeline including private security systems, electronic security and existing security personnel, and this is what we are trying to implement right now. We can do this with local resources.

What is the current state of our natural gas exploration in Iraq?

There are projects we developed for this country. We have partnerships with the central government of Iraq, the Chinese and Gazprom. There are also projects we have developed together with Shell for the master plan. We should be able to get more from Iraq where a total daily capacity of 12 million barrels is the target. We should be able to reap the benefits of our cooperation with Iraq.

But the decisive factor is the US?

In that case, we can focus on partnership instead of seeking jobs that will make us a mere operator.