Ankara, February 2, 2006— The World Bank, the Republic of Turkey and Boru Hatlari ile Petrol Tasima A.Ş. (BOTAS) signed today the Agreements of a US $325 million Loan to support a Gas Sector Development Project for Turkey. Country Director Andrew Vorkink signed the Loan Agreement on behalf of the Bank together with the Acting General Director Rıza Çifçi and Ismail Çeşmeci, Head of Financial and Accounting Department from BOTAŞ and the Guarantee Agreement with the General Director Memduh Aslan Akçay from Undersecretariat of Treasury. BOTAŞ will be in charge of the overall implementation of the project. The project’s main objective is to increase the reliability and stability of the gas supply in Turkey by putting into place critically needed gas storage and network infrastructure, and supporting BOTAŞ in strengthening its operations as a financially stable and commercially managed corporation. The project has two components: 1) Tuz Gölü underground gas storage facility: The gas storage facility will be located in an underground salt formation close to Tuz Gölü, a salt lake in South Central Turkey. The facility, upon completion, will have a storage capacity of about 960 million cubic meters of working gas and 460 million cubic meters of cushion gas (the portion of gas which is required to remain in the cavern to maintain its integrity). The facility will have the capacity to deliver 40 million cubic meters of gas per day up to 20 days and can be refilled at the rate of 30 million cubic meters per day over a period of 25 days. 2) Network Expansion: The project will also finance two compressor stations for BOTAS at Erzincan and Çorum as well as other network infrastructure. These stations are required to help transmit the increasing volumes of gas expected to be imported into Turkey from existing and new sources. The Çorum station will have a capacity of 30 MW and is required in order to enable increased supply from Russia, while the Erzincan Station will have 39 MW of compression capacity and will enable the import of natural gas from Azerbaijan.  During the Loan Signing Ceremony Andrew Vorkink, Country Director for Turkey stated that the World Bank was pleased to help the Government of Turkey in expanding gas storage capacity in the country and constructing the first storage facility in underground salt formations which are the most flexible and can respond to gas demand faster than other types of storage. “Natural gas consumption has grown rapidly in Turkey over the past two decades - with an average annual growth rate of 24%. Gas is an important energy source and gas penetration is increasing rapidly in cities as more of them are being connected. As household and industrial demand increase, the lack of adequate storage poses a risk to supply security particularly during winter months. Therefore, the increase in storage capacity is extremely important and a national priority.
“Natural gas storage facilities constructed under this project will help keep the cost of natural gas more stable across the seasons, give better security of supply, and encourage the construction of gas distribution networks, Vorkink continued. “Also, due to its unique geographical location, Turkey is well-placed to be a major gas transit country, exporting into mainland Europe. Storage capacity will also be important in establishing Turkey as a reliable transit country.” The lending instrument for the Gas Sector Storage Project is a Fixed Spread Loan (FSL) with 7-year grace period and 13-year final maturity. 
For more information about the World Bank’s work in Turkey, visit: http://www.worldbank.org.tr. For more information about this project, visit: http://www.worldbank.org/projects |
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