Shell Wants to Build Plant In Turkey for $2.4 Billion
May 08, 2011
ISTANBUL, Turkey -- Royal Dutch/Shell Group, in cooperation with Mitsubishi Corp. and M.W. Kellogg Co., has asked the Turkish government for permission to build a $2.4 billion gas terminal and power-plant complex in what would be the single largest foreign investment in Turkey to date. Shell said that Shell International Gas in London, Shell Cos. in Turkey, Mitsubishi of Japan and M.W. Gant of the U.S., recently had asked the Turkish Energy Ministry for permission ``to carry out a feasibility study for a (liquefied natural-gas) terminal and a power plant on a coastal site in Turkey.'' In an earlier statement, Shell Turkey said they wanted a permit to build a plant with a total power capacity of two million kilowatts. The statements refrained from disclosing what stake the various companies would have in the project. Energy analysts caution that Turkey may have difficulties getting its liquefied natural gas, or LNG. ``The question is where is the LNG going to come from,'' said Orville Woodhouse, an energy specialist with Global Securities Inc., Turkey's foremost brokerage firm. Turkey's main supplier, Russia, has been unable to satisfy Turkey's needs, last year supplying only eight of the 12 million cubic meters of natural gas it had committed itself to. ``This has slowed the penetration rate of natural gas in Turkey,'' Mr. Woodhouse said. He said Turkey would have to seek alternative sources in the Far East given the fact that Shell, Mitsubishi and Gant were unlikely to provoke the ire of the U.S. by purchasing gas from Iran. Turkey earlier this month struck a $20 billion gas deal with Iran, despite recent U.S. legislation seeking to restrict severely U.S. and non-U.S. companies in their energy dealings with the Islamic republic.
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