Disavowing Kurdish independence, Turkey prepares for Kurdish energy future

Turkey seems to have officially disavowed any support for the independence of the Kurdistan Regional Government in Iraq.

By MICHA’EL TANCHUM
A Syrian Kurd refugee in Iraq 390 (photo credit: Azad Lashkari/Reuters)
A Syrian Kurd refugee in Iraq 390
(photo credit: Azad Lashkari/Reuters)
Turkey seems to have officially disavowed any support for the independence of the Kurdistan Regional Government in Iraq, despite AK Party deputy chairman Hüseyin Çelik’s June 28 comments to The Financial Times to the contrary. However, the KRG’s recent export of oil to Turkey’s Mediterranean oil port of Ceyhan, which after transshipment arrived in Israel’s Ashkelon port, highlighted the economic benefit to Turkey of a Kurdish political entity in Iraq with sufficient autonomy to market its energy independent of the constraints of the Iraqi central government in Baghdad.
Indeed, Ankara’s far-sighted effort to become a leading energy transportation hub includes a new oil refinery on Turkey’s Aegean coast and the Trans-Anatolian Natural Gas Pipeline that respectively can accommodate oil and natural gas from the autonomous Kurdish region of Iraq.
The new $5.6 billion STAR oil refinery is being built at the Petkim Petrochecmical Complex about 50 km north of the Turkish coastal city of Izmir. Petkim is the largest petrochemicals manufacturer in Turkey and currently accounts for approximately 30 percent of Turkey’s market share for refined petroleum products.
Petkim is aggressively seeking to increase its market share by replacing imported products with its own products produced in Turkey. The STAR refinery will provide Petkim’s plants with feedstock fuel that will enable Petkim to manufacture high value petroleum products at a considerable cost reduction with the effect of cutting down Turkey’s dependence on imported refined petroleum products, particularly in critical sectors such as diesel fuel and jet fuel.
In addition to Azeri Light grade and Russian Urals grade oil, the STAR refinery is being constructed with the capability of refining Kirkuk grade crude oil allowing Petkim to manufacture high value petroleum products from crude oil imported from the KRG. Test production of the refinery will start in early 2017 and it is expected to become operational by 2018.
The Trans-Anatolian Natural Gas Pipeline (TANAP) also carries the potential for an independent Kurdish political entity to market its natural gas resources to Turkey and the EU.
The $10.5b. TANAP is being constructed by Azerbaijan’s state oil company SOCAR and its junior partner the Turkish state-owned oil and natural gas pipeline company BOTAŞ, which owns a 30% stake in the project.
With an initial capacity of 16 billion cubic meters (bcm), TANAP will initially receive gas from Azerbaijan’s Caspian Sea Shah Deniz field and then transport the gas across Turkey to the Turkish-Greek border where it will link with the Trans-Adriatic pipeline (TAP) for delivery to the European Union. Expected to be fully operational by 2018, Turkey will receive approximately 6 bcm with the remaining 10 bcm intended for the EU.
Once operational, the volume of natural gas transported via TANAP is expected to increase by one billion cubic meters per year. Since Turkey’s domestic natural gas consumption has more than tripled, jumping from 15 bcm in 2000 to 46 bcm in 2010, the gas delivered via TANAP is of considerable importance to the continued functioning of the Turkish economy.
Additionally, the Turkish economy stands to benefit substantially from the lucrative transit revenues received for gas transported to the EU across its territory. Aside from natural gas from Azerbaijan, TANAP also will be able to transport natural gas from the KRG should it be sufficiently independent to sell its gas. Experts estimate that the KRG could export 10 bcm of natural gas to Turkey as early as 2020.
With the countries of the Arab Middle East embroiled in unprecedented political turmoil that is straining their relations with Turkey, the AKP government’s deepening relationship with the KRG constitutes a foreign policy achievement with significance for Turkey’s long-term geo-strategic position. Turkey’s ambition to become a global energy hub would benefit from a Kurdish political entity sufficiently independent to market its hydrocarbon energy resources via Turkey.
While the exact political relationship between Turkey and an independent Kurdish government is yet to be determined, the infrastructure of the economic relationship is being established.
The author is a Fellow at Shalem College, Jerusalem, and at the Middle East and Asia Units of the Hebrew University’s Truman Research Institute for the Advancement of Peace. He also teaches in Tel Aviv University’s Department of Middle Eastern and African History.