Turkey plans 40 more oil tanks to bolster energy security

• Plan to boost energy storage capacity
• 40 new storage tanks at Ceyhan
• Construction to begin this year

Turkey is planning to massively upgrade its oil storage capacity to both boost energy security at home and help position the country as a centre for crude trading across the region.

Under plans announced on April 25, state pipelines authority Botaş is to commission 40 new oil storage tanks at the port of Ceyhan on the Mediterranean. 

When complete, the tank farm will have a storage capacity of 35 million barrels, according to Botaş general manager Abdülvahit Fidan, and take Turkey’s total crude storage capacity from its present level of just over 11 million barrels to 45 million. 

The expansion of the Ceyhan hub’s storage capacity is not a kneejerk reaction to the supply disruptions resulting from the Iran war, but part of a longer term plan to strengthen energy security and help position Turkey as a regional oil trader, Fidan said. The land for the development was expropriated in 2024 and an environmental impact assessment completed last year. 

“This project will strengthen Turkey’s resilience against energy crises and enable the country to play a more decisive role in regional energy markets,” he said.

Work on constructing the first six tanks is due to begin later this year and be completed in 2028, Fidan said, with the remaining capacity brought online by 2031.

The tank farm will be well served for sources, with two major pipelines terminating at Ceyhan, one being the export link for Azeri oil running from Baku through Georgia and down through Turkey, with the other carrying crude from Iraq’s northern fields, including the country’s semi-autonomous Kurdish region.

At full capacity, the two pipelines can deliver 2.5 million barrels per day (bpd), though the Iraq-Kirkuk-Ceyhan line is currently only operating at a reduced level of between 300,000 and 450,00 bpd. 

Ali Arif Aktürk, energy expert and former head of Botaş’s natural gas procurement department, said developing storage capacity at Ceyhan was a step towards the port becoming an energy hub, though he told AGBI that more investment was needed to achieve this goal.

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“The more your tank capacity increases naturally, the more your trade flexibility increases,” Aktürk said.

“However, while increasing the tank capacity is important, so too is increasing the range of products to include diesel, benzine, or jet fuel, meaning it is a must to have a refinery there.”

By developing a downstream capacity, Ceyhan could become the Rotterdam of the eastern Mediterranean basin, he said, referring to the Dutch port and its extensive hydrocarbons processing industry that serves much of Western Europe. 

There were plans 20 years ago to build processing capacity at Ceyhan in a dedicated energy free trade zone but they lapsed. However, with the development of Botaş’s tank farm, more downstream industry could sprout in the region.