Volume 07,Issue 01

Analysis of Natural Gas Transportation Prices from Cyprus to Turkey

Authors

Mitra Khaksar, Mir Mohammad Ali Malakoutian, Vahid Najafi Moghaddam Gilani, Reza Salehfard

Abstract
Natural gas is a clean, environmentally friendly and one of the most efficient sources of energy that has a significantly increasing demand worldwide. It has a very wide range of uses such as fueling the power generators and heating the buildings with very low levels of greenhouse gas emissions. Cyprus has luckily discovered natural gas reserves and is on the verge of extracting it. The volume of these reserves is more than the domestic demand and it enables the country to transport it. The aim of this paper is to estimate whether it is financially feasible to transport the natural gas found in Cyprus to one closest potential market, namely, Turkey. To attain a conclusion, the transportation price of natural gas through a gas pipeline to Turkey is calculated separately and then compared with the import prices these countries are currently paying to buy natural gas from neighboring countries. The results under the base case scenario demonstrated that it is feasible to transport the natural gas found in Cyprus to Turkey. Also various sensitivity analyses in this paper showed that the possible profit of Turkey is different against the changes in the volume of natural gas to be extracted and the import prices. It is determined that there is a high level of risk in importing the gas through pipeline.

Keyword: Natural Gas, Pipeline, Transportation, Cyprus, Turkey.

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