Offshore staff
OSLO, Norway – Development of TPAO’s recent Tuna-1 gas discovery in the Black Sea could save Turkey up to $21 billion in gas/LNG import costs, according to Rystad Energy.
The discovery reportedly contains 320 bcm of resources. Although the recovery factor remains to be determined (based on results of follow-up drilling), Rystad believes production at the upper end could peak at 20 bcm/yr.
Sindre Knutsson, vice president Gas Markets at the consultant, said: “The timing of the discovery could hardly be better, as nearly 40% of Turkey’s contracted import volumes – representing 24 bcm out of the country’s 59 bcm per annum imports of pipeline gas and LNG – are set to expire in 2020 and 2021.”
Production from Tuna could start in 2028, with a breakeven price in the range $3-$3.50 per MMBtu.
Rystad also foresees a recovery in Turkey’s natural gas demand after two consecutive years of falling gas consumption, primarily due to declining demand from the power sector, where gas been displaced by renewable energy (i.e. hydro, wind, and solar).
Gas demand in 2019 was 44 bcm, but this could rebound to 59 bcm by 2030 and 71 bcm by 2040, the consultant claimed, driven by both the industrial and domestic sector’s needs.
At present the country relies virtually entirely on imports, with domestic gas production at only 0.3 bcm in 2019. Gas is imported through pipelines from Russia, Iran and Azerbaijan, and Turkey also has long-term LNG import contracts with Algeria, Nigeria and Qatar, and more recently has added supplies from the US.
“Turkey’s newfound hope that low-cost discoveries are feasible will no doubt pave the way for further exploration programs,” Knutsson said.
“The government seems to have grasped the strategic importance of this breakthrough, as demonstrated by its decision to send no fewer than five war ships to escort the seismic vessel Oruc Reis through the [eastern] Mediterranean Sea.”
09/09/2020
