The major upgrade in the estimate of natural gas reserves in the Black Sea, accelerated energy supply security efforts amid the global energy crisis and record renewable installations and production defined Türkiye’s energy outlook in 2022.
The year has been particularly marked by Türkiye’s ramped-up hydrocarbon explorations in the Mediterranean Sea and the Black Sea with its three drillships – Fatih, Kanuni and Yavuz.
The efforts ended with Türkiye revising its estimate of natural gas reserves in the Black Sea upward by nearly a third after a new field was located and after appraisal work at a previous site.
The total volume of gas Türkiye has gradually discovered in the offshore fields now amounts to 710 billion cubic meters (bcm), a find that is estimated to have a market value of $1 trillion (TL 18.72 trillion).
The increase came after President Recep Tayyip Erdoğan on Dec. 26 said reserves in the Sakarya field were revised to 652 bcm, up from 540 bcm previously. Another 58 bcm of gas was found in another offshore field nearby.
Türkiye announced its first gas discovery about two years ago in the Tuna-1 well, which was then estimated at 405 bcm and was the world’s largest offshore find in 2020. It made another discovery in 2021 in the Amasra-1 well, which was at the time said to be holding around 135 bcm of gas. It lastly discovered an additional 58 bcm at the Çaycuma-1 field.
1st gas delivery due
It plans to make the first gas delivery to the national grid by the end of the first quarter of 2023.
Türkiye as of June launched and has almost completed the pipelaying process of the 170-kilometer-deep (105-mile-deep) seabed pipeline that will feed the Black Sea gas into the grid.
Construction of the onshore gas processing facility that is being set up at the port of Filyos in the northern province of Zonguldak is also almost complete.
In the process until the reserve revisal, Türkiye had drilled 13 wells in the Sakarya field. It looks to add another 20 or 25 wells in the period ahead.
About 10 million cubic meters (mcm) of gas per day is expected to be transferred in the initial phase, while the infrastructure has been set up to enable this figure to peak at 40 million cubic meters through 2026.
Set to be backed by the government, the projected fixed investment to be made by the state energy company Turkish Petroleum Corporation (TPAO) in the Sakarya field has been determined as around TL 145.2 billion and an additional 1,018 people are expected to be employed for the project.
Fleet expansion
Meanwhile, Türkiye has also been expanding its survey and exploration fleet. It now boasts four drillships, after Abdülhamid Han, the latest and most advanced of the vessels, arrived in mid-May.
The seventh-generation vessel joined Fatih, Kanuni and Yavuz, all sixth-generation ships purchased in recent years.
Dubbed "a symbol of Türkiye’s new energy vision," the 238-meter-long and 42-meter-wide vessel is one of the five seventh-generation drillships globally. It is capable of drilling down more than 12,000 meters, features a tower height of 104 meters and a crew capacity of 200.
Abdülhamid Han was sent off for its first mission in the Mediterranean on Aug. 9, before it started operations at the Yörükler-1 well almost a week later. TPAO announced on Dec. 5 that the drillship had started operations at the Taşucu-1 well.
Energy security efforts
To meet the growing demand for energy and mitigate the effects of the global energy crisis, Türkiye has stepped up efforts to secure gas supplies, as well as to diversify sources with renewables and nuclear projects.
In addition to expanded infrastructure, the new year will witness a major milestone, as Ankara aims to start operating the first reactor at Akkuyu, its first nuclear power plant, by the middle of 2023, the 100th anniversary of the founding of the Republic of Türkiye.
Türkiye is almost completely dependent on imports to cover its energy needs, which leaves it particularly vulnerable to rising costs that skyrocketed following Russia’s invasion of Ukraine.
Last year, 45% of the gas used in Türkiye came from Russia and the rest from Iran and Azerbaijan.
The country’s annual gas consumption has risen from 48 bcm in 2020 to a record 60 bcm in 2021, according to official figures.
Erdoğan said 2022’s consumption was expected to stand at around 53.5 bcm. Earlier estimates had put the figure at up to 63 bcm, but the power generated from renewable resources this year drove the gas consumption downward.
1st nuclear reactor to start operation
2022 witnessed the groundbreaking ceremony of the fourth reactor of Akkuyu Nuclear Power Plant, built by Russia’s state-run nuclear energy agency Rosatom on the Mediterranean coast.
The scheduled completion of the first unit along with the delivery of nuclear fuel is set for the first half of 2023. The remaining three reactors are due to start operation by the end of 2026, at a rate of one per year to ultimately have a total installed capacity of 4,800 megawatts (MW).
Once completed, the plant is expected to produce up to 10% of domestic electricity needs.
Rosatom in October announced it also started negotiations with Türkiye for the construction of another nuclear power plant in Sinop on the Black Sea coast.
Separately, Türkiye in early October announced it had agreed with Azerbaijan to double the capacity of the Trans Anatolian Natural Gas Pipeline (TANAP) from 16 bcm of gas per year to 32 bcm.
Seeking to secure energy supplies and cope with soaring energy prices, Türkiye two weeks ago held a long-awaited ceremony to mark an increase in capacity at its first underground natural gas storage facility, in what officials said will make it Europe's biggest storage site in the seas.
The capacity increase enables the storage of 4.6 billion cubic meters of gas at the Silivri Natural Gas Storage Facility, up from an earlier capacity of 3.2 billion. The site’s daily withdrawal capacity of 28 million cubic meters (mcm) has been increased to 75 mcm.
The facility is expected to meet 25% of Türkiye’s daily gas needs during intense winter days.
Work related to increasing the capacity at the country’s second storage unit, Tüz Gölü (Lake Tuz), is also underway. Located in central Aksaray province, the facility currently has the capacity to store natural gas measuring up to 1.2 bcm on a yearly basis.
Natural gas trade hub
In what probably marked one of the most important developments of 2022, Russian President Vladimir Putin in October floated the idea of setting up a "gas hub" in Türkiye following explosions that damaged Russia’s Nord Stream gas pipelines under the Baltic Sea.
Putin said Russia was delivering "not great, but presentable" volumes of gas via the TurkStream pipeline and suggested making Türkiye the principal route for deliveries to Europe.
Erdoğan backed Putin’s idea and both countries instructed authorities to work on a road map.
Putin most recently reiterated Russia’s plan to build the hub and said prices for sales to Europe would be defined using an "electronic platform" that would be set up at the center.
Details and the final decision on the hub are expected to be made in 2023, officials from both Türkiye and Russia have said.
Domestic oil discovery, output
Türkiye in December also announced it had discovered 150 million barrels of net oil reserves in southeastern Mount Gabar, valued at $12 billion, dubbing the discovery "one of the top 10 onshore discoveries in 2022."
With the find, Türkiye’s proved oil reserves increased from 450 million barrels to 600 million barrels.
Erdoğan had also announced a discovery of $1 billion worth of oil reserves in the Çukurova field in the southern Adana province in late June. The quantity of recoverable oil from the field is expected to reach up to 8 million barrels.
Officials said TPAO’s daily oil production, which stood at 37,000 barrels five years ago, has now slightly exceeded 60,000 barrels. Meanwhile, TPAO broke a record in domestic production by reaching a daily oil equivalent of 62,000 barrels in early July.
New partnerships
Among others, Energy and Natural Resources Minister Fatih Dönmez in early November announced that Türkiye and Algeria would establish a joint oil and natural gas exploration company.
The new company, set by Sonatrach, the national oil and gas company of Algeria, and Turkish Petroleum, will be engaged in oil and gas exploration activities primarily in Algeria as well as in countries around the region.
In 2021, Algeria and Türkiye embarked on a joint project in the petrochemical field, in which a petrochemical factory was founded in the southern Turkish city of Adana. The project was initiated in October 2021 with the partnership of Ronesans Holding from Türkiye and Sonatrach.
Separately, Türkiye and Libya in early October signed several preliminary economic and maritime agreements that included an accord on energy that will allow for oil and gas exploration in Libyan waters in the Eastern Mediterranean.
The hydrocarbons deal came three years after the two countries signed a maritime border agreement, which demarcated their shared maritime borders in the Eastern Mediterranean to prevent any fait accompli by regional states.
Booming renewables
As it ramped up efforts to generate more power from clean sources, Türkiye launched large-scale projects and began solar and wind power station tenders.
The total installed electricity capacity reached over 100 gigawatts this year, with more than half from renewables, including hydro, wind, solar and geothermal. Renewables accounted for more than 95% of new capacity increases in the country in 2021.
In a first, Türkiye reached a stage this year where the electricity produced from solar and wind energy accounted for more than 21% of the overall power output in July.
The country achieved a record-high annual capacity increase in wind energy in 2021 with the addition of approximately 1,750 megawatts (MW), up from the previous all-time high of 1,248 megawatts added in 2016.
After a hydropower capacity of around 31,600 megawatts, wind is the second-biggest renewable source of electricity at 11,307 megawatts, a figure that is expected to have exceeded 12,000 by the end of 2022. Türkiye’s installed solar power reached 9,120 MW as of the end of October.
Türkiye is forecast to see around 64% growth in its renewable energy capacity to 90 gigawatts (GW) in the next five years, according to the International Energy Agency (IEA), with almost 75% of this addition stemming from solar and wind.
The growth will help it rank fourth in Europe and among the 10 biggest renewable markets in the world.
Türkiye ranks fifth in Europe and 12th in the world in renewable energy installed capacity and seventh in Europe and 12th in the world in wind energy installed power.
Renewable Energy Resource Zone (YEKA) tenders continued to be the main drivers of renewables growth in 2022. The Energy and Natural Resources Ministry declared 59 areas in 32 provinces as YEKA areas based on solar energy on Feb. 3.
The ministry declared 18 areas in 21 provinces as YEKA regions based on wind energy on Nov. 26.