Invitations for tender for second phase of Iran-Turkey gas line

May 5, 1997 Turkey's state pipeline company Botas will soon invite local and international bidders for the second phase of a proposed gas pipeline that will eventually extend from Iran's Tabriz to Ankara, officials said recently. They said Botas was preparing tender terms for the 874-km (546-mile) section from Erzurum to Ankara via Sivas city. The officials did not give an estimated cost but analysts say it will be up to $ 500 million.
"Botas will seek 100-% foreign credits from bidders," said one energy official. "It will put out the tender invitation soon and seek the bids probably by mid-June," he told.
The entire Turkey-Iran pipeline, which will be 1,420 km (888 miles) long, will initially carry 3 bn cm of Turkmen gas to Turkey through Iran from 1998 or 1999. The amount will go up to 10 bn cm by 2005, including 3 bn cm of Iranian gas. The project is part of a 23-year, $ 23-billion deal signed in August between Turkey and Iran.
The United States, Turkey's chief ally, has tried to dissuade Turkey from going ahead with the project and recently said it was seeking details to see if the deal violated US law. Turkey has said it would go ahead with the plan, citing its urgent need for gas from a nearby source. Turkey said its deal did not breach US law since both Iran and Turkey were building the sections of the pipeline by themselves.
Under the deal, supplies from Iran will rise to 10 bn cm by 2005, which will include 7 bn cm of Turkmen gas.
Marc Grossman, US ambassador to Ankara, reiterated the official US position that Turkey should abandon Iran as a gas supply source, and turn to Caspian and Central Asian suppliers instead.
Botas awarded the first phase of 300-km (188-mile) of the pipeline from the Iranian border to the eastern Erzurum town to the local consortium of STFA Enercom-Fernas, whose price tag for the section was $ 117.5 million.
Kudret Pehlivan, an official from STFA Enercom, said construction work on the first phase would begin in a few months after engineering and equipment procurement works were completed. Iran is building the section from Tabriz to the Turkish border, which will be 270 km 169 mile) long.
Officials said the Erzurum-Ankara line would be divided into two further sections as 410-km (256-mile) Erzurum-Sivas and 464-km (290-mile) Sivas-Ankara lines.
Oil sources attending an energy conference in Istanbul said Hyundai, Hoesch, Marubeni, Sumitomo and Mannesmann were among foreign companies with Turkish partners had indicated interest in the tender.
Turkey buys a total of about 9 bn cm of natural gas annually from Russia, Algeria and spot markets. Last week it struck an agreement with Turkmenistan to get initially 3 bn cm gas and electricity from the former Soviet republic. It also agreed a 25-year, $ 13.5 billion deal last week with Russia's gas giant Gazprom to get gas reaching 30 bn cm annually by 2010 through another pipeline network.