Zorlu Group, a Turkish company with investments in energy and technology, will bid for the capital's natural-gas grid in a sale that may be worth as much as $3 billion. Zorlu will compete with companies including OAO Gazprom, the world's biggest gas provider, when Ankara sells its network by the end of next month. Zorlu is also considering a bid for electricity networks the government plans to sell, Sungur Bursa, chief executive officer or Zorlu Group's energy unit, Zorlu Energy, said in an interview Monday. Turkey is selling Başkent Doğal Gaz, the owner of a 30-year license to distribute gas in Ankara to reduce the state's role in energy, as urged by the International Monetary Fund.
The sale could fetch as much as $3 billion, Ankara Mayor Melih Gökçek said last month. Natural-gas consumption in Ankara is expected to more than double to 7.5 billion cubic meters a year in the next decade. ``It's one of Turkey's first big gas privatizations and the potential for growth is large as Ankara undergoes an urban transformation,'' Bursa said, declining to estimate how much the grid would cost. Zorlu is building natural-gas networks in Gaziantep and Tekirdağ and has 30-year licenses to distribute gas in the two cities. The company is also exploring for gas in Turkey and has reserves of as much as 100 million cubic meters of the fuel in the northwest region of Thrace.
Electricity Bid
Zorlu will also compete for state electricity companies Turkey plans to sell under its $10 billion IMF accord, Bursa said. Energy Minister Hilmi Güler last week said Turkey may resume the sale of distribution grids in Istanbul, Ankara and Sakarya by year's end after postponing them in January. The government will also ``swiftly'' sell state power producers, Güler said. “Our interest in the electricity distribution sales continues and we're also interested in the electricity generation which the state plans to privatize,” Bursa said.
The sales are expected to come after a soon-to-be-announced electricity price rise, the first increase since 2002. Zorlu Energy and other non-state power producers have complained that leaving electricity prices unchanged, as with natural gas, has made their businesses unprofitable. Uncertainty over pricing has discouraged investment by non-state power producers, even as demand has reached record levels, he said. Demand rose about 15 percent this year, more than double the government forecast of 7 percent, leading to blackouts this summer, according to state power company Teias.
Investment Abroad
Zorlu has directed much of its investment overseas, Bursa said. The company is building a $700 million power station near Moscow with a capacity of 680 megawatts that may later be expanded to 1,360 megawatts, he said. It's also spending up to $800 million to build an 800-megawatt plant in Israel and plans two smaller power stations with a combined capacity of 150 megawatts, making Zorlu Energy the biggest non-state power producer in Israel, Bursa said. Zorlu is also building a 50 megawatt wind-powered station in Pakistan for about $90 million, he said.
(Bloomberg)