ECONOMY

Greece signs gas deal with Turkey

Greece and Turkey yesterday made a major step toward forging closer economic ties by signing an agreement to construct a pipeline linking the natural gas fields of the Caspian Sea region with the European market. «It is a political choice which addresses the energy requirements of our nations and commits us to also act as transit countries, securing adequate natural gas supplies for the European market,» said Development Minister Akis Tsochadzopoulos, who signed the 250-million-euro deal with Turkish Energy and Natural Resources Minister Mehmet Guler at the end of a two-day meeting of European Union energy ministers. «This major project will bring benefits to both Turkey and Greece,» Guler said. The pipeline, officially named Interconnector Turkey+Greece (ITC), could bring natural gas from Iran, Azerbaijan, Turkmenistan, Kazakstan and Uzbekistan to Europe. Russia currently supplies more than half of Turkey’s natural gas. The deal provides for the extension of the pipeline from the western Turkish town of Karacabey through the Sea of Marmara to the city of Komotini in Thrace in Greece. The pipeline with 200 kilometers (124 miles) in Turkey and 85 kilometers (53 miles) in Greece is expected to be completed by 2005 and initially carry 3.5 billion cubic meters of gas annually, with a potential of being expanded to 11 billion later. Europe’s dependence on natural gas is projected to rise from 49 percent today to 73 percent by 2020. The project is being undertaken by the two countries’ respective state natural gas companies, DEPA and BOTAS. Greece, which is in dialogue with Italy for the extension of the pipeline to western Europe, will contribute 118 million euros toward the cost of the project, of which 29 percent will be EU subsidies, 29 percent will be paid by the government, and the remaining 42 percent by DEPA. On the Turkish side, the project is still at the study stage The two countries also have a tentative agreement to connect their power grids by 2006.