Turkey’s Dependence on Russian Energy, and Its Recent Natural Gas Discoveries

Turkey (officially, Türkiye) is an energy-poor country. Roughly 85% of its energy supply comes from fossil fuels, roughly equally divided among coal, oil, and natural gas. Coal is mined domestically and imported, but almost all of Turkey’s natural gas and oil comes from other countries. Russia supplies roughly half of its natural gas. Unlike most NATO countries, Turkey has not placed sanctions on Russia, and as a result its natural gas imports continue unabated.

Turkey also figures prominently in Russia’s global energy strategy. Two major pipelines transport Russian natural gas to Turkey, one of which (TurkStream) was recently completed (2020). Moscow and Ankara have hoped to turn Turkey into a major natural gas hub, allowing Russia to export gas to southern Europe without having to move it across Ukraine. The Ukraine War has complicated but not undermined such plans. As recently reported by Natural Gas Intelligence, “Russia is turning to Turkey as a potential natural gas hub partner with a new sense of urgency to find new export outlets for volumes left stranded by damages to the Nord Stream pipelines in September.” The Russian-Turkish energy partnership extends beyond natural gas. In 2021, Russia was Turkey’s second largest supplier of coal, following Colombia. Turkey’s first nuclear power plant (Akkuyu), has been jointly built by the Russian firm Atomstroexport and the Turkish construction company Özdoğu; it is expected to come online in 2023.  Financing has been almost entirely provided by Russian investors.

Political tensions between Russia and Turkey have periodically intruded on their energy collaboration. Most recently, Ankara irritated Moscow by asking for a 25 percent discount on natural gas payments and requesting that all payments be delayed until 2024 due to domestic economic problems. Building a Turkish hub for Russian gas exports also faces external economic and geopolitical obstacles, particularly from other NATO countries. As recently noted by Natural Gas Intelligence:

A Russia/Turkey gas hub would have to secure financing for the billions of dollars needed to construct new subsea pipelines under the Black Sea, which is currently in a war zone. Without access to Western technology and financing, a new pipeline project could take years to build.

Turkey’s energy prospects, however, have recently been transformed by substantial natural gas discoveries in its Black Sea Exclusive Economic Zone. In the final week of 2022, an estimated 170 billion-cubic-meter gas reserve was found at the Çaycuma-1 field. Combined with previous recent discoveries in the Sakarya field, Turkey’s natural gas reserves have been elevated to 710 billion cubic meters. Gas from these fields should become available sometime in 2023, alleviating Turkey’s energy crunch. Discoveries to date, however, are not adequate to meet long-term needs, as the country consumes 50 to 60 billion cubic meters of gas every year. To put recent Turkish discoveries in global context, Russia has proven natural gas reserves of some 50,000 cubic kilometers.

Coal remains one of Turkey’s major energy sources, thwarting its ability to decrease its carbon emissions. Turkey’s domestic coal industry is highly subsidized in order to reduce natural gas imports. Lignite, the least energy-dense and most polluting form of coal, predominates. Coal production surged from 2015 to 2019 but has declined since then. To meet the country’s growing demand, imports have surged in recent years. The war in Ukraine, however, has disrupted supplies and increased costs, generating economic hardship. Particularly hard hit is Turkey’s large and energy-intensive cement industry. CemNet reported in March 2022 that the Turkish cement industry was facing an “imminent crisis.”  In 2014, Turkey was the world’s fifth largest cement producer, following only China, India, the United States, and Iran.

Turkey has made relatively modest investments in renewable energy. Hydropower has long provided roughly 20 percent of its electricity, but recent droughts have reduced the supply. Turkey’s has good climatological potential for solar and wind, and wind power is now growing, providing about 10 percent of the country’s electricity. In 2021 the energy think tank Ember reported that “it is now cheaper to build new wind or solar for power generation in Turkey than running even the most efficient hard coal power plant that relies on coal imports.” Ember’s analysts thus foresee an accelerating transition to renewable power, with a “win-win-win situation” resulting in “lower import bills, lower emissions, [and a] lower carbon levy by the EU.” Such hopes may be overstated. Energy intermittency and the lack of economically feasible storage still poses a major obstacle to solar and wind energy development in Turkey – as in the rest of the world.