IEA President Birol: Turkey must make the best use of the new LNG wave starting in 2025

IEA President Birol evaluated several current issues, including the changing global energy geopolitics, Turkey's position, and nuclear energy.

Reminding that Turkey is a significant natural gas importer, Birol noted that a large portion of the country's current account deficit stems from energy imports.

Highlighting that a strong, unprecedented increase in LNG is expected in natural gas markets as of 2025 with the commissioning of new LNG facilities in many countries, Birol said, "Turkey must make the best use of the new LNG wave starting in 2025. First, it must make agreements in light of this data. The hand of buyer countries will be strengthened after 2025. Therefore, agreements may need to be made accordingly. Turkey may also need to sit at the table during this period to make some improvements to existing contracts."

Emphasizing that the market will shift from one where sellers are strong to one where buyers are strong during this period, Birol noted that the amount of gas that will emerge in the markets could lead to a redefinition of certain balances.

Drawing attention to Turkey's strong natural gas infrastructure, Birol assessed, "Turkey has the infrastructure to import more gas with its existing facilities and export it to Europe. It can make the best use of this as well. A new page is opening in LNG as of 2025. I hope that gas-importing countries like Turkey can benefit from this in the best way possible."

Pointing out that Turkey can strengthen its position thanks to its existing infrastructure, Birol stated that it could play an important role regarding gas in its region.

THE "MAGIC" WORD IN ENERGY: DIVERSIFICATION

Touching upon Turkey's nuclear energy investments and goals, Birol said, "I think nuclear is an indispensable technology for Turkey. If Turkey is going to build other nuclear power plants in addition to Akkuyu, I support that as well."

Reminding that Germany's economy is going through a difficult period due to its dependence on a single country for natural gas and oil, Birol noted the following:

"I think the magic word in energy is diversification. You shouldn't put all your eggs in one basket. In this respect, if a country has a serious dependence on another country in all areas of energy, I think diversifying can be a wise policy. Here, of course, one must also look at the alternatives. What do the alternatives offer you? At what prices do they offer it? What technologies do they offer? You need to diversify when choosing a partner. When choosing technology, you need to look for it to be the best technology. It also needs to be a good thing in terms of cost."

THE IMPACT OF DISRUPTIONS IN THE RED SEA REMAINED LIMITED

Addressing the international logistics disruptions caused by increasing regional risks in the Red Sea, Birol assessed, "10 percent of global oil trade and 9 percent of LNG trade are conducted through the Red Sea. For this reason, the impact has remained limited for now. According to our estimates, there is a two-week extension in transport when traveling around South Africa instead of the Red Sea. This leads to an increase in costs. This increase has been around 1-2 dollars in oil prices."

Stating that the continuation of the current situation in the Red Sea and its further spread to the region could have serious consequences, Birol expressed, "The region alone accounts for one-third of global oil trade. For now, the price increase has remained at a certain level, but it could have serious consequences in a situation where the entire region is affected."

TURKEY'S NATURAL GAS AND NUCLEAR ENERGY GOALS

Turkey has a strong infrastructure with 7 international natural gas pipelines, 5 LNG facilities including 3 floating storage and regasification units (FSRU), and 2 underground natural gas storage facilities.

Having signed gas supply agreements with Bulgaria, Hungary, Romania, and Moldova this year, Turkey aims to be not just a transit country in gas trade, but also a country that exports and manages the gas it supplies.

For Turkey, which is planning nuclear power plants in Sinop and Thrace after the Akkuyu Nuclear Power Plant currently under construction in Mersin, nuclear energy plays an important role in reaching the 2053 net-zero emission target.

Within the framework of its National Energy Plan, Turkey aims to add 7.2 gigawatts of nuclear energy capacity to its energy portfolio by 2035 and over 20 gigawatts by the end of 2050.