Producing electricity using natural gas : global experience and opportunities for TURKMENISTAN

1. Producing electricity using natural gas : global experience and opportunities for TURKMENISTAN International Conference : Oil & Gas of TURKMENISTAN-2003 Kamil Güven, ÇALIK Enerji AŞ 26 September 2003, Ashgabat

2. Turkmenistan is important to world energy markets, because of its natural gas reserves; which may vary according to different sources from 101 trillion cubic feet of proven reserves and several times more of potential reserves. Whichever the case, Turkmenistan as one of the most important gas-rich country and also borders the Caspian Sea, which contains major oil and gas reserves. Creative, constructive and strong approaches of H.E. Saparmurat TURKMENBASHI to establish modern energy infrastructures with neighbor countries to cooperate to cover their energy supply needs and to create income from national deposits of the country. One of the key points of the National Development Plan of TURKMENISTAN is the utilization of the country’s natural resources and increasing the economic potential by integrating its energy infrastructure into the world economy.

3. TURKMENISTAN Natural Gas Export TURKMENISTAN can easily export its oil and oil-products through seaports, railways and roads but because of its geographical location, natural gas could be exported only through the pipelines, which are mostly already in use. Establishment of new export routes may also be required to increase the export possibilities.

4. TURKMENISTAN Natural Gas Export

5. While Turkmenistan is producing more natural gas than its local consumption and export needs; establishment of new pipelines are needed and requires more capital investment. Therefore, one of the most important ways to export the hydrocarbons is to produce value added productions such as fertilizers, electricity and petrochemical productions from hydrocarbon sources.

7. Such value added productions will have higher export potential than the hydrocarbons themselves and would create more value than regular hydrocarbon exports. Therefore, TURKMENISTAN has planned to establish new plants to produce such value added products, including the electricity, which is one major through others.

9. Until the independence of the country, Power Plant technology for TURKMENISTAN was mainly steam turbines. Nowadays, it could be easily said that initial stage of the development of TURKMENISTAN’ s energy industry is completed by construction of modern power plants using new technologies of the long-term technology partners. The extensive experience of such companies create pathway to modern technologies and undoubtedly increase the efficiency in the sector. In 1998, Gas Turbine Power Plants started to be constructed by using American General Electric technology. The first “GE-Gas Turbine Power plant” is properly working, and TURKMENISTAN Government is satisfied with the technology and operation conditions of such new technology. During the initial development stage, TURKMENISTAN increased its Gas Turbine Power Plant capacity up to 500 MW, which represents around 20% of the overall installed capacity, and such development increased country’s strong role as energy exporter country in the region.

12. In 2002, TURKMENISTAN started to construct the second Gas Turbine power plant utility in the TURKMENBASHI Oil Refinery, where could be easily called as the heart of the Oil Refining sector of TURKMENISTAN. Construction of such plant is completed within 1 year, which is very short for such power plant including all of its auxiliaries and dual-fuel capability (low sulphure diesel oil is the stand-by fuel of the natural gas). STC-TURKMENNEFTEGAZ is the Owner of the facility. STCTURKMENNEFTEGAZ is awarded Calik Enerji AS to construct a “Dual Fuel 3xGas Turbine PP” which represent the most robust system for the one of the most developed oil refinery in region which is TURKMENBASHIOil Refinery.

15. In 2002, Ministry of Energy & Industry also started to implement two more power plant projects: One in Abadan city, as the extension project of the already existing gas turbine facility. The latest project is the construction of a new gas turbine power plant in Balkanabat city. All these four Gas Turbine power plants have similar capacities of 125 MW and use the same gas turbine technology. Therefore, TURKMENISTAN is establishing its own technical expertise in the field of operation of new gas turbine technology power plants.

17. The new technology in gas turbine power plants, has improved the quality of the electrical energy as well as the efficiency, the reliability and the availability while such improvement has evidently promoted the export potential of TURKMENISTAN. The results of such stage-by-stage approach is being much clearer and fitting the requirements of the all-relevant parties that, both the technical and administrative departments promoting such technology. Next stage of the improvement is the reconstruction of the existing old technology steam turbine power plants by constructions of gas turbine power plants and then to convert/extend the gas turbine power plants to the combined cycle power plants.

20. According to such technology based approach, Government of TURKMENISTAN had possibility to consider all the details of the applications and in 2003 signed a framework agreement with the technology giant of US General Electric as General Equipment supplier and Calik Enerji AS as General LSTK Contractor for construction of additional 1,500 MW until 2011 in countrywide. Hence, while reconstruction of the old systems would be executed according to a long-term plan, export capability would also be improved due to more reliable new technology systems with the very low cost of electrical energy production. While improving the quality of the produced energy, TURKMENISTAN also consider the improvement on the electrical energy export infrastructure of the existing grids which are already directly or indirectly extending to the countries such as Iran, Afghanistan, Ermenistan and Turkey. The improvement of export among the neighbor countries has focused on connecting their power grids to allow the countries to exchange power if needed through high capacity 220-400 kV power transmission lines to be constructed.

21. TURKMENISTAN already has installed a capacity of 3,100 MW and more than 300 MW is under construction. Annual electrical energy production of existing power plants is 10.52 gWh while the total domestic consumption is 9.46 gWh. 1.06 gWh of the overall production is exported to the neighbor countries directly or to the third countries through the neighbors. Plan for TURKMENISTAN is to improve the installed capacity of power plants up to 4,650 MW until the year of 2011. By increasing the capacity of the Power Plants with high efficiency technology used, Turkmenistan will be able to export up to 3.5 gWh of electrical energy in 2005 and 11 gWh in 2010. Moreover, the operation of new power plant facilities allows satisfying the local demands beside the export quality of the electrical energy products with high added value and converts existing deposits to the revenues. According to the studies executed by joint cooperation of the Government of TURKMENISTAN and international organizations which have expertise on electrical energy that; while TURKMENISTAN have plenty reserves of natural gas, improvement of the high quality electrical energy in the country would be benefit of all the neighbor countries and other regional countries indirectly. It is also clear that, beside the environmental regulations; TURKMENISTAN has desire to upgrade its “Simple Cycle Power Plants” to the “Combined Cycle High EfficiencySystems”

22. ÇALIK Enerji Sanayi ve Ticaret A.Ş., TURKEY kamil.guven@calikenerji.com cenerji@calikenerji.com