Friday, October 07, 2011

Turkey, Russia diverge over gas prices

Turkey, Russia diverge over gas prices

While gas disputes between the EU and Russia are often political, Turkey's dispute with Russia is over securing better pricing.  By Alakbar Raufoglu for SES Türkiye -- 07/10/11

Turkey, like the EU, has been dependent on Russia's natural gas supplies for decades. But late in the summer, Ankara joined a chorus of European companies demanding that Gazprom, Russia's state-run gas monopoly, cut its natural gas prices, increasing pressure on the lucrative pricing model that underpins Russia's gas exports.
As the Russian side did not budge, the Turkish Energy Ministry decided last week not to renew the 25-year contract between the nation's Petroleum Pipeline Corporation (BOTAS) and Gazprom for the annual delivery of 6bcm of gas to Turkey along the TransBalkan pipeline.
Ankara was seeking a 20% gas cost rebate on Balkan purchases.
"This [decision] doesn't mean our natural gas purchases from Russia will stop or we will face any shortage in that sphere," Ahmet Erdal Feralan, ruling Justice and Development Party (AKP) member of the Parliamentary Energy Committee, told SES Türkiye. "Our private sector firms have already started negotiating with Gazprom to buy the rest of the gas," he said.
Mete Goknel, the former director of BOTAS, says the government would like a "just and fair" deal, although he admits there were some "tactical mistakes" during the negotiations with Gazprom. "We could have announced this [cancelation] a bit earlier and very confidently," he told SES Türkiye.
For Tugce Varol, an Istanbul-based Russian energy policies analyst, all of this is "kind of an AKP game".
"It is not termination but finalization of a long-term agreement [with Russia]," says Haluk Direskeneli, an Ankara-based energy analyst, questioning whether the Turkish gas market is ready to compensate for the natural gas shortage.
"We may face gas pressure drops, a shortage of gas supply in Edirne, Canakkale and Istanbul gas distributions," he said, emphasizing Russian gas is important for Turkish domestic energy generation and is a long-term commitment for both countries. "However supply security, too much dependency and the current account deficit are the difficulties of Turkey."
Varol warns that if Turkish firms don’t manage to get the required gas in the middle of the winter, it could damage the AKP’s reputation, because neither Azerbaijan nor Iran has capacity to fill this gap. "In fact, Ankara and Moscow are playing their last hand before the beginning of construction of the South Stream," she adds.
Alexander Jackson, a Caspian analyst at the London-based Menas Associates, says that although energy disputes involving Russia are often political, in this case, Turkey is playing hardball when it comes to gas prices, a tactic it has also tried with Azerbaijan and Iran.
"Turkey is less willing than previously to let Russia dictate gas prices," he says, adding any future pricing disagreements will be the subject of much fiercer negotiations.
"Time is working in favour of the consumer side. The link of gas to the oil price is out-dated," says Friedemann Mueller, chairman of the research group Global Issues at the German Institute of International and Security Affairs. Russia will keep its position as the main supplier of Turkey and the EU, but it will have to accept more competitive market rules.
"This is the game that will go on for more years and Turkey is well advised to keep cool in negotiations, but also to do more for a pipeline infrastructure that offers alternatives to Russia, not in order to exclude it as a supplier, but to have a choice among competitors," he told SES Türkiye.

Tuesday, October 04, 2011

Natural gas long term agreement with Russia

Natural gas agreement with GazProm of Russia for 6-bcm gas supply will be finalized as of 31st Dec 2011, let us be clear on that decision.
The Long-term Agreement  is NOT terminated, NOT cancelled but it will be finalized, not renewed as of 31st December 2011
It is not termination but finalization of long-term agreement
West pipeline gas capacity will be allocated to private gas distribution companies to buy gas direct from Russia.
There is no difficulty on Russian side, since they can keep their gas supply underground for long term, until they create a new opportunity to sell at good price in international markets.
Turkish West Natural gas pipeline will continue Russian gas supply until 31st December 2011 plus some more time for take- or- pay settlement
Question is whether Turkish gas market is ready to fulfill the Natural Gas shortage, which may will be occur after West pipeline gas supply agreement finalization (not cancellation) with Russia.
West pipeline will be allocated to private gas distribution companies to buy gas direct from Russia, no termination but finalization agreement
It is expected/ presumed that there is an ongoing negotiation for Private gas supply agreements between private companies and GazProm, but  these are not made public yet.
Anyhow these agreements will be kept confidential at all times, and Russians will try to keep the current international natural gas market price levels.
In Turkish West Natural Gas pipeline gas distribution, the supply risk is in in-city gas distribution companies of Edirne, Çanakkale and Istanbul
We may face with gas pressure drops, shortage of gas supply in Edirne, Çanakkale and Istanbul gas distributions
Privatization scheme/tender for Natural gas firing 1120Mwe Hamitabat combined cycle power plant is cancelled. Plant has gas supply risk.
Russian natural gas supply is important for Turkish domestic energy generation and it is a long term commitment for both countries.
However supply security, too much foreign dependency  and current account deficiency are the difficulties of Turkey, it is obvious that there should be countermeasures to reduce these risks.
Solution is in more intelligent investments on renewable energies solar/ wind/ small hydro,  and local coal/ lignite firing clean coal technologies. Your comments are always welcome.

Monday, October 03, 2011

A Tale of Prinkipo

YEAR 2011. The draft scenario/ screenplay described below is completely fiction/ set up, has nothing to do with reality nor with any real person. 
This is a draft screenplay, prepared to present to Italian/ US film director(s) Ferzan Özpetek? or Woody Allen?, to enable them to shoot the film in Prinkipo. Senario has passages on Turkish food, Turkish kitchen, Turkish  wine, Turkish gays, there are also Italian architectural elements in Prinkipo island at the turn of 20th Century and the problem of energy supply security, as well as protection of nearby environment. 
This scenario is completely fiction, it explains local energy / environmental concerns and intended to draw attention to the energy/ environmental problems in a small island near Istanbul.

Film starts depicting, Architect Ayse (40+ years of age Turkish-American woman) living in New York, with her Italian-American husband, Al (Aldo) Fretelli, in ferry from Bostancı (Anatolian side of Istanbul) to Buyukada (Prinkipo island in ancient times for Buyukada, Prince islands), expedition begins with images of the city line services aboard ship. The camera approaches to luggage tags. JFK-Istanbul THY Turkish airline luggage tags appear. They landed a few hours ago.  Couple have 2 little cute girls at 5-7 years old with them. Ferry arrives to Buyukada seaport/ docks, Ayse meets her mother and father. They pull wheeled luggage at a crowded square, enter the crowded queue  of horse carts. Ayşe her mother and her small daughter in one cab, Al his father-in-law and eldest daughter of Aldo on the other cab to ride. Horse Carts leave from the travel range, they pass by Hotel Splendid Palas and Anatolia Club, along the way watching magnificent old stone houses (mansions) built  mostly designed by  Italian architects at the turn of 20thcentury. Father-in-law owns the stone house by an Italian architecture at the end of the road. House helper rushes to open the gate and carry the luggage. Together, they pass to a large balcony overlooking the sea, the cold white wine is serves, women in the kitchen rush for dinner. Guys wear kitchen aprons, help to slice   bread, make salad, cut melon, and watermelon, nothing more. They sing together Puccini opera arias, which is in the environment from a CD player.

Ayşe’s American husband, the groom (Italian American AL / Aldo Fretelli), is an important International Hedge Fund manager in New York.  He is well educated, well trained, very rich and very intellectual. Ayşe has Post-Doc degree in Architecture and old house renovations from the University of Firenze in Italy, so Ayse speaks Italian as well as English and Turkish.  Conversations continue in mixture of Italian, English, Turkish languages.

Ayşe's father, a medical doctor, with the money he earned from his clinic, had invested in healthcare / hospital industry. Early evening time his son, Ayşe’s brother Ali and his young wife come. Ladies exaggerates the work in kitchen. Ali makes salad, in the meantime he explains the local investment climate to his brother-in- law. They have new investment in IT sector but they need to find a new investment sector. Local IT sector is very competitive, energy sector may create new opportunities to earn more money.

Properly cooled local white wines are served, while Aldo has 2 each Italian Barberesko wines with himself, bought in Airport duty-free brought as present for his hosts. After white wines, they open up the Italian red wines first, each takes half-cup, then taste. After they open up local red quality wines, of Okuzgozu, Boğazkere, KalecikKarası grapes. Other invited guests of Prinkipo island appear  at the gate, academics, gay couples, rich Turkish/ Jewish businessmen/ businesswomen with their spouses, speaking in French/ English/ Italian/ Turkish in the highly educated intellectual environment. Sisyphus of Prinkipo and his wife enters the environment, they bring a cup of fresh bean dish.

The family house/ mansion  is almost 100-year old stone structure with high ceilings also the work of an Italian architect. Trotsky mansion known also as Arab Izzet Pasha -Designed by Architect Nicholas Dimadis, construction completed in year 1885,  is located adjacent. Guests talk about Trotsky, his stay in Prinkipo island between 1929-1933. They talk about those years. Then they discuss about how to renovate Trotsky mansion without disturbing the original structure. 

Environment consistently plays Puccini operas via CD player. A young girl enters, the room, closes CD player and plays Beethoven's 3rd piano concerto by memory. In the end of piano music, they all applaud the young pianist. 

American husband / wife Ayse and AL, sleep long/late hours on the morning the next day. The window is open, the smell of the sea and nearby pine tree forest is in their sleeping room, the children rush in the room with pleasure. Breakfast is in a large spacious balcony. Helpers do act as if they are family members / relatives in comfort. There is an old but fit gardener / caretaker in the garden.

They leave the family mansion around noon time. They visit new exhibition in Çınar (Maple) square, “Islands- Buildings- Architects” on magnificent architectural  stone buildings of the past, most of them are designed/ and/or built by Italian/ Greek/ Jewish Architects at the turn of 20th century. They examine the pictures/ photos/ documents/ designed in the exhibition. Buildings are beautiful but old, dilapidated so they all need renovation. It is not possible to sell those houses to foreigners with no reciprocity agreements, so new application is long term leasing say for 49 years. They admire the Mizzi Palace which was designed by Italian architect Raimondo T. D’Aronco, who was also Royal Architect of Ottoman Sultan Abdulhamit-II. They feel that there is a growing commercial / business capacity in the island for restoration/ renovation works of the old mansions/ houses.
At noon time, they go to Prinkipo SanPasifiko Italian Roman Catholic church (by Italian architect Domenico Giorgio Stampa, built in 1862) for weekly Tuesday ritual. 
Italian priest, Father Don Fellice meets the couple. He prays for them, then they all listen to Organ Church music. The organist of the San Pacifico church, Turkish / Italian young Renato plays "Je t'aime, moi non plus" passages within the the player, Don Felice has half angry, half-scolding manner with her ​​eyes.
Fener Greek Patriarchate has received the ownership of the the former Greek Orphanage -by Levantine French architect Alexander Vallauri. Ayşe received the work for its  restoration (New York City architect, Nicholas Koutsomitis).  
New York Times, newspaper released an article on this subject in the summer months. They climb the KadıYoran(Tired Judge?) slope in the late afternoon as the sun sets, through the path/road of Lovers, and TÜRKYILMAZ street route. They  go to the old Greek orphanage, watch the old building outside, dilapidated wooden building, biggest wooden structure in Europe, second biggest in the world. The Patriarchate has received the ownership, but could not raise funds for renovation which has an estimated budget of 50 million U.S. Dollars.
The following day early in the morning, they plan 8-km cycling/ bike tour around the island, they arrive to Lunapark square at the middle of the island, witness an unfortunate accident of an inexperienced local not wearing bicycle helmet with a horse cart.
A young local girl is injured and transferred by ambulance to Buyukada Public hospital. Ambulance passes through path where Sisyphus (your writer) is collecting litter -plastic pets / glass / metal box. 
At the square, they lock their bikes to a side pole. They climb the Slope of Misery (or Torture) leading to Aya Yorgi (Hagia Yorgi) Monastery - designed by Greek Architect Kapetanakis, construction completed in year 1906.
While climbing the Torture slope to AyaYorgi Monastery, they do not look back, they do not speak, they only prey to what they believe. Ayse explains, "Future is shaped by  expectations, you ask/ pray/ request the best for yourself, for your loved ones, you get the best in time.”  AL confirms "Very true, but as in the economy, in this regard there is also a Nobel Prize in Economics in year 1995, for this principle given to Robert E. Lukas," he says.
They light candles for realization wish of their prays in the monastery. The priest reads the prayer, they pray. Don Felice of SanPasifiko is now the master in AyaYorgi / the same actor, with orthodox priest costume. On the hill, they watch Sea of Marmara and high flying migratory birds coming from Europe going to Africa, with some resting time on Old Greek Orphanage roofs.
They come back to LunaPark (merry-go-round) square, they take their bikes. They ride towards FethiOkyar House (architect Sedat Hakki Eldem, construction 1938), they pass by ViranBağ, they arrive to South Park former old garbage dump, then they give a break in the  recreational public park area, at south end of Prinkipo island.
Aldo is an important Hedge Fund manager in New York, he says "This place is empty, owned by the state land, or the Treasury". Asks his wife, 'What is the estimated area of this park?, Ayşe responds," Probably 100 acres ". (In fact, 10 acres). AL responds, "Here is a nice set up to build a nuclear power plant with 1000 MWe electricity output, adds “let’s see how we can do it.”
Ayse says "Don't be silly," she adds, "You need to have at least 400 acres for 1000 MWe Nuclear power plants, could you get  construction permission, in city of Istanbul?"
AL answers, "That would be great, it's a hard rock bottom, we fill the rest of the sea a little, we place heavy load on solid rock island floor, we put light weights on the filling construction, we generate 1000 MW of electricity, and transfer to main land through 3km coastal HVDC cables, it is easy at about 300+ US Dollar per meter cost at current market plus some auxiliaries, to transmission transformer on the other end of the channel. We supply power to all Istanbul to almost 15 million people, we have supply security, You have ever raising energy prices due to very expensive Russian natural gas. We do not have environmental pollution, we can manage waste disposal and security with high technology, no problem, lots of money.”
Adds, “We need to learn more about Turkish energy / investment incentive legislation, then we need to meet with the Minister of Energy and Chairman of the Energy Markets Regulatory Board. We need to find an experienced local partner company in energy investments. Your family is good in  health / hospital/ IT sector, but Energy is a new investment sector for them. Let me explain the situation here to my British partners, Lord Humphrey (head of the British financial group) and Sir Barnard responsible for energy investments, (from ”Yes Minister” BBC TV serials”.
“We need to find local investor partners for sharing risks with us, and help/teach us.  Your father mentioned a local friend who got involved in similar thermal power plants, where environmentalists have objected, by talking to him we may learn more about business and investment climate. He has experience, he knows how this type of investment is made, how to get license, how to get land expropriation if/where  necessary"
Hamidiye Mosque (construction completed 1895, architect unknown, Raimondo T. D'Aronco?)
Imam Mesut Bakhtiyar Effendi (same actor playing the priest role), usually on the mosque yard, playing football with the local kids. He responds to the angry people "Children's voices are not bothered by the Great God!" says.  He tells about the importance on  the environmental sensitivity in Friday prayers. Most of the Muslim male roles/characters go to Friday prayers. Writer / restaurateur, begins local environmental organization to oppose Nuclear power plant investment on the island.  Author / restaurateur, is the lover of  Ayşe's youth, which is told in Episode-1.
The end of the movie: 
We all know that NPP is a long term investment. Financing, tendering, construction, operation are all very difficult. Waste disposal and security problems are not yet solved. On the other hand, the island's south coast is very deep, the landfill is not possible,  parking space is very small for nuclear power plant construction. Nuclear / thermal power plant can’t be installed, however a small a solar power plant with a capacity of up to 10-MWe can be installed. Wind power plants can’t be installed, because on the air corridor above the island of Prinkipo, perhaps thousands of migratory birds fly every year from Europe to Africa, which continued for millions of years on the natural route. Wind turbines, propellers, if mounted on the island hills, perish thousands of birds while passing, and wind turbines can’t work, they immediately  deteriorate. Solar panels can be placed in front of the empty construction site on AyaNikola beach. Solar power plant can be established here to generate electricity for  the people of the island for their domestic electricity needs.
No response yet from “Ferzan Ozpetek”. Wonder if it helps to change “Italian ALDO” character to "Jewish Aaron" with Sefarat heritage, whose family emigrates to New York from Prinkipo at the turn of the 20th century. His old relatives still live in Prinkipo island. So I tell about more details of Jewish Prinkipo culture. They go to “Hesed Le’Avraam” Synagogue in Prinkipo- (built in 1904 designed by Gabriel Tedeschi, contractor Behar Parali) for Saturday praying, where they meet with local Rabbi, the same actor who played priest and imam earlier.  I wonder, if Director "Woody Allen" gets interested with our draft scenario? Could he shoot a similar movie to "Midnight in Paris" in Prinkipo?? For example, say "A Tale of Prinkipo". This may also help to reduce unnecessary tension between Israel and Turkey.
I do not know how to continue this screenplay. I'll write back once ... But how will? (help..)

Sisyphus of Prinkipo island

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