Turkey has approved the development plan for the long anticipated "Kanal Istanbul," a ship canal that would connect the Black Sea with the Sea of Marmara, aimed at easing tanker and heavy container ship traffic in the Bosporus.
The Bosporus is one of the world's major waterways and a conduit for oil, grains and other commodities and manufactured goods between the Eurasian hinterland and the Mediterranean. It is also technically challenging to navigate and has been the scene of periodic accidents and spills.
Turkey's state news agency, Anatolia, on March 27 quoted Environment and Urban Planning Minister Murat Kurum as saying the development and zoning plans had been approved and opened for "consultation."
The project's environmental impact assessment was approved in January and construction has been scheduled to begin by or in 2023.
The Kanal Istanbul project, west of Turkey's largest city, was first announced by President Tayyip Erdogan in 2011 following the collapse of a project to construct an oil pipeline from the Black Sea to the Mediterranean -- the Samsun-Ceyhan route.
Both projects were predicated on an expected sharp rise in volumes of crude being transited to the Black Sea from the Caspian, and thus increases in shipments out of the Black Sea through the Bosporus.
However, traffic levels have fallen below those expectations due to lower-than-expected production from Kazakhstan's biggest oil fields, which had been expected to provide the bulk of the increased flows, coupled with rising demand for crude from refineries fed by pipeline from the Black Sea.
Kazakh crude exports and exports of Russia's Urals crude from the Black Sea have been held back by OPEC+ production cuts, particularly since the COVID-19 pandemic, leading to steeper cuts and higher levels of compliance.
However, production of Kazakhstan's Tengiz crude is expected to increase as an expansion project nears completion, currently scheduled for mid-2023.
Building the canal creates the potential to divert other types of shipping as well as crude tankers away from the Bosporus.
Loadings of Kazakhstan's CPC crude blend at Novorossiisk fell below 1.2 million b/d in March last year and remained below that for most of 2020, before rebounding in February 2021 to 1.55 million b/d.
The bulk of Azeri crude production in the Caspian transits not to the Black Sea but to the Mediterranean via the 1 million b/d Baku Tbilisi Ceyhan (BTC) pipeline, which also carries volumes of Kazakh and Turkmen crude.
Flows through BTC have long been far below the line's official capacity -- the highest average flow through the line in the past decade was 718,000 b/d in 2015 -- with February volumes averaging only 519,179 b/d, down on average daily flows of 570,000 b/d in 2020.
