Turkey Eager to Join Shale Gas "Revolution"

Article Summary
Taking a cue from the US, many countries, including European ones and Turkey, are exploring their own gas reserves, writes Mehmet Nayir. Turkey has at least 20 trillion cubic meters of gas.

The US has become an exporter of gas due to its ample shale gas reserves. It now represents a threat to the globes largest natural gas exporter, Russia. Russia’s leading Sberbank warned Gazprom that with the US revolution in gas, prices are likely to decline by 50% over the next four years.

The development of shale gas has become a "game changer" for the natural gas market, since it brings an end to the Russian monopoly over gas supply. The US has now started exploration on its shale gas resources, which are projected to last 231 years. The price of 1,000 cubic meters of shale gas has dropped to $90. Countries dependent on Russia for gas took notice of this, and started to take action. Turkey and European states have shown considerable interest in exploring their own shale gas resources.

This shale gas “revolution” threatens Russia, which has long been the worlds major gas exporter. Sberbank, Russia’s largest state-owned bank, released a report on this issue. The report suggests that by 2016, Gazprom will lose a significant share of its European market and prices will drop because of shale gas exploration. European countries will no longer need to purchase expensive gas from Russia. It states that Gazprom might not be the main gas exporter in the European market in 2016.

While the price of 1,000 cubic meters of shale gas is around $90 in the US, it costs $400 in Europe and Turkey. The price of the gas depends on the price of oil. Gazprom is expected to reduce the price of its gas to compete with the shale gas. 

Turkey will start exploration operations in June. Turkish energy expert Arif Akturk says, “if Turkey has shale gas, this could be a game changer. The US has transformed into a major gas exporter and even this will affect the gas prices and markets.”

Altan Kolbay, chairman of Petroleum Platform Association, argues that, “The prices in the US domestic market have dropped to one fifth of the LNG prices in the Far-East market.”

Shale gas reserves have been found in 32 countries and 48 regions around the world. Turkey is known to have, along with Poland, the world’s largest shale gas reserves. The state-run Turkish Petroleum Corporation (TPAO) has recently announced that there are shale gas basins in the regions of Diyarbakır, Erzurum and Thrace with 20 trillion cubic meters of natural gas and 500 billion barrels in reserves.

According to the agreement, Shell will be taking on all of costs involved with drilling in these regions. The TPAO officials note that “the initial work will begin in June. We could reach important reserves.”

Found in: turkish petroleum corporation, turkey, tpao, shale gas, lng, gazprom, gas exports, gas, fracking

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