Turkey Says Qatar Interested In Afsin-Elbistan Power Project

Gulf Arab state Qatar is considering investing in Turkey’s Afsin-Elbistan coal-fired power plant project, which the United Arab Emirates dropped out of this year, the Turkish energy minister said on Thursday.

Turkey is keen to make the most of its own coal resources to reduce its dependence on imported natural gas, and Energy Minister Taner Yildiz said that the talks could result in a deal being agreed within two to three months.

“We see that Qatar has intentions about this. We have held very good meetings,” Yildiz told CNN Turk television, referring to his and Prime Minister Tayyip Erdogan’s meetings in Doha on Wednesday.

Abu Dhabi National Energy Co (TAQA) and Turkey’s state-owned Electricity Generation Company in January agreed on a $12 billion project to build several power plants using lignite coal reserves in Turkey’s Afsin-Elbistan region.

But in late August, TAQA announced it had delayed the start of construction until 2014, while Turkish energy sources told Reuters that TAQA was pulling out of the project.

Among the reasons cited by industry officials for the Abu Dhabi company’s withdrawal were increasingly difficult financing conditions amid a currency sell-off that reduced Turkey’s appeal as an investment destination.

But Erdogan’s outspoken criticism of the toppling of Egypt’s Islamist President Mohamed Mursi, which set him at odds with the United Arab Emirates, was also seen as instrumental in Abu Dhabi’s decision.

The Afsin-Elbistan region holds up to 45 per cent of Turkey’s lignite reserves.

Lignite, often referred to as brown coal, is likely to play a bigger role in power generation alongisde expected rapid growth in electricity demand.

Energy officials have said that China and South Korea, among others, are also interested in investing the Afsin-Elbistan region.