Ceyhan Port: A New Energy Hub? - Can Arıhan

Turkey, an unlucky country in terms of domestic energy reserves, has special importance in the regional energy puzzle because of its unique geopolitical position. Both the Turkish Straits (see also the article in the previous issue of Synergy about the Kanal İstanbul Project) and the energy pipelines that carry the energy of the east (e.g., Russia, Caspian Sea basin, Iraq) to the west (i.e., Turkey and Europe) contribute to the geopolitical importance of Turkey. A small port town in Southern Turkey's Çukurova region and the Adana province, Ceyhan, is an important part of Turkey's aspirations to strengthen its place in the regional energy puzzle.

Ceyhan derives its importance from two major pipelines (i.e., Baku-Tbilisi-Ceyhan Oil Pipeline, BTC Oil Pipeline, and Kirkuk-Ceyhan Oil Pipeline). Although the deliveries via Kirkuk-Ceyhan Oil Pipeline have experienced severe shortages from time to time because of the internal problems in Iraq, BTC Oil Pipeline has been a reliable delivery route after it became operational in June 2006. With its total length of 1768 km, BTC Oil Pipeline passes through Azerbaijan, Georgia, and Turkey. BP is the largest shareholder (with 30 percent) in BTC Company, which is the company that operates BTC Oil Pipeline, but Turkish (TPAO with 6 percent) and Azerbaijani (Socar with 25 percent) companies are shareholders in this giant multi-national enterprise as well. With this major project, Azerbaijani and Turkmen, and Kazakh oil have been transported to the world oil markets via the Ceyhan port. Hellenic Shipping News notes that over 3 billion barrels of oil have been shipped from the Ceyhan port since the BTC Pipeline's commissioning. From 2006 to the end of 2018, the crude oil was transported to the world oil markets by 4085 tankers from the Ceyhan port.

Ceyhan is now set to become home to major oil refineries in addition to being a transit route for crude oil. As the Global Energy Monitor points out from the year 1986, the crude oil from Ceyhan was carried to Kırıkkale Tüpraş Oil Refinery via the Ceyhan-Kırıkkale Oil Pipeline to transform crude oil into petroleum products such as gasoline, diesel fuel, etc. However, if there were an oil refinery operational in Ceyhan, there would not be the need to carry the crude oil to Kırıkkale, and the crude oil could have been transformed into petroleum products in Ceyhan. These products could be sold at world markets at a higher margin of profit. As Anadolu Agency mentions, a $10 billion oil refinery will be constructed in Ceyhan. Turkey Wealth Fund will fund this facility, and the construction is planned to start in 2021. Apart from the Wealth Fund, Rönesans Holding has major investments in the Ceyhan Petrochemical Industrial Zone with many international partners such as South Korean GS, Algerian Sonatrach, and Dutch Port of Rotterdam. The construction of Rönesans Holding's projects is also planned to be completed in a few years.

All in all, Ceyhan has certainly emerged as an important port in the Eastern Mediterranean region because of the significant amount of energy resources transported there via major pipelines. And suppose the necessary industrial infrastructure is completed. In that case, Ceyhan can emerge as an energy hub where crude oil and petroleum products are delivered to the world energy markets. Such a vital role of Ceyhan will support Turkey's aspirations to become a dominant player in the regional energy puzzle rather than a country through which giant energy pipelines pass but only leaving the minor benefits of being the host country. Turkey is not the second anymore, but it shall still go through a challenging road to become a dominant player in Europe and the Middle East's energy puzzle.

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