China In Talks On $10-12 Billion Energy Investment: Minister
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[May 05, 2014]
By Orhan Coskun
ANKARA (Reuters) - Turkey and China
are in talks on a $10-12 billion investment deal for the
Afsin-Elbistan coalfield and power plant project in southern Turkey,
Energy Minister Taner Yildiz told Reuters.
Turkey is keen to make the most of its coal resources to reduce its
imports of natural gas and signed a deal with Abu Dhabi National
Energy Co (TAQA) <TAQA.AD> on the project in January 2013.
However, TAQA said in August it was delaying investment and Turkey
subsequently began talks with other companies.
"There will be an investment of $10-12 billion in the Afsin-Elbistan
field. This will include use of the coalfields. We are in talks with
China for a deal on this subject," Yildiz said late on Sunday.
It was not possible to say when any deal with China might be signed,
The Afsin-Elbistan region holds up to 45 percent of Turkey's lignite
reserves and the project includes the construction of a 8,000
megawatt (MW) coal-fired plant.
"This is a big project. We have to set up the Afsin-Elbistan field
project correctly. We have a big store of information. We are
working with China on this," he added.
Lignite, or brown coal, is likely to play a bigger role in power
generation as Turkey's economic growth bolsters electricity demand.
Yildiz said separately Turkey was not currently planning to be a
partner in the Trans Adriatic Gas Pipeline Group (TAP) project,
which is to transport gas from the Shah Deniz II field in Azerbaijan
to Europe by the end of this decade.
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The approximately 870-kilometre-long TAP pipeline will connect with
the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border
at Kipoi, cross Greece and Albania and the Adriatic Sea, before
reaching southern Italy.
Yildiz said Turkey was to raise its stake in TANAP to 30 percent
from 20 percent, with the remaining stake held by Azeri energy
"The increase in our stake in TANAP will be more appropriate both in
terms of the capital structure and the operation. Shares in both TAP
and TANAP could change hands a lot," he said.
"TAP is not currently on our agenda. We will assess the subsequent
developments," he said.
Yildiz said the plan was for gas flow on the TANAP project to be
ready by the end of 2018, with initial gas transport of 16 billion
cubic meters (bcm) annually. Turkey will take 6 bcm and the
remaining 10 bcm will be sent to Europe.
Capacity is expected to increase to 31 bcm when the second stage of
the project is completed.
(Writing by Daren Butler; editing by Dasha Afanasieva and Jason
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