Turkey, UAE sign $12 billion energy agreement

Turkey, UAE sign $12 billion energy agreement

Article | January 3, 2013 – 2:21pm | By Elena Ralli

Turkey and the United Arab Emirates today signed an agreement for the development of coal fields in southern Turkey to generate electricity. The agreement between Abu Dhabi-based TAQA and Turkey’s state-run power company EUAS for the $12 billion project is the biggest Arab investment in the Turkish energy sector.

As Turkish Energy Minister Taner Yildiz stated at the signing ceremony that took place in Ankara: “This is a very serious investment, a significant investment. This is the second-biggest investment made in Turkey after the two nuclear power plant projects.”

In particular, according to the agreement, the coal reserves at Afsin-Elbistan basin in southern Turkey will be put to use for electricity production. The Afsin-Elbistan basin possesses 4.4 billion tonnes of coal reserves, which account for approximately 40 percent of Turkey’s lignite resources. The project will provide the region in Turkey’s south-east with 8,000 megawatts of power at full capacity. Initial operation is to start in 2018 and the full project be completed in 2021.

Turkey will benefit a great deal from the development of lignite since it will have the opportunity to reduce natural gas imports that are worth $1.2 billion and account for a large part of the country’s current account deficit.

In addition, with Iran being Turkey’s second-biggest natural gas supplier, the latter is also under pressure from the West to reduce gas imports due to Tehran’s controversial nuclear programme.

via Turkey, UAE sign $12 billion energy agreement | New Europe.