WASHINGTON, July 2, 2014—The World Bank’s Board of Directors today approved an additional financing of US$400 million to the already existing Gas Sector Development Project of Turkey.
The Bank has supported the Government’s gas sector reforms and implementation strategy for the past decade since the approval of the original US$325 million Gas Sector Development project in November 2005.
The objective of the Gas Sector Development Project for Turkey is to increase the reliability and stability of the gas supply in Turkey by implementing critically needed gas storage and network infrastructure, and to support the Petroleum Pipeline Corporation of Turkey in strengthening its operations as a financially stable and commercially-managed corporation.
The overall project consists of two components: (a) the gas storage facility, and (b) network expansion. The additional loan would finance US$400 million of the cost overrun in the Tuz Golu gas storage facility.
The Tuz Gölü underground gas storage facility is 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 for up to 20 days, and can be refilled at the rate of 30 million cubic meters per day over a period of 25 days.
On the occasion of the loan approval Martin Raiser, 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. According to Martin, “Natural gas consumption has grown rapidly in Turkey over the past two decades. Natural gas accounts for almost one-third of the country’s primary energy supply, and fuels almost 50 percent of electricity generation. As household and industrial demand increase, 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.”
The lending instrument for the Gas Sector Storage Project is a Flexible Loan, 16-year repayment maturity, with an 8-year grace period.