Turkey - Gas Sector Development Project

Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 10/31/2005 Report No.: AC1793 1. Basic Project Data Country: Turkey Project ID: P093765 Project Name: GAS SECTOR DEVELOPMENT Task Team Leader: Ranjit J. Lamech Estimated Appraisal Date: September 7, 2005 Estimated Board Date: November 29, 2005 Managing Unit: ECSIE Lending Instrument: Specific Investment Loan Sector: Oil and gas (100%) Theme: Public expenditure, financial management and procurement (P) IBRD Amount (US$m.): 325.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER 213.00 213.00 Environmental Category: A - Full Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] 2. Project Objectives The Project objective is to increase the reliability and stability of gas supply in Turkey by implementing critically needed gas storage and network infrastructure, and support BOTAS in strengthening its operation as a financially stable and commercially run corporation. 3. Project Description I. The Gas Storage Facility - The gas storage facility will be in an underground salt formation located close to Tuz Golu, a salt lake in South Central Turkey. The facility will have 12 caverns which will be "solution-mined" in phases of four caverns each. The facility, upon completion, will have a storage capacity of about 960 Million cubic meters of working gas and 460 million cubic meters of cushion gas. The facility will have the capacity to deliver 40 Million cubic meters of gas per day for up to 24 days and can be refilled at the rate of 30 Million cubic meters per day for a period of up to about 32 days. The cushion gas however, must remain in the caverns as long as the storage facility is in operation in order for the caverns to maintain their structural integrity, given the pressure from the surrounding salt. This component will finance the following investments: (a) The surface and sub-surface facilities including engineering and construction, solution mining, the gas pipelines and the compressor facility; Page 2 (b) The water and brine discharge pipelines; (c) 460 million cubic meters of cushion gas; and (d) Consulting services including an Owner's Engineer (for assistance in supervision and monitoring of implementation), environmental monitoring and regulatory aspects. The Bank loan will finance the first 8 caverns, with BOTAS obtaining additional financing for the remaining investment. II. Network Expansion - The project will also finance two compressor stations for BOTAS at Erzincan and Corum. These stations are required to help transmit the increasing volumes of gas expected to be imported into Turkey from existing and new sources. The Corum station will have a capacity of 30 MW and is required in order to enable increased supply from Russia, while the Erzincan Station will have 39 MW of compression capacity and will enable the import of natural gas from Azerbaijan. 4. Project Location and salient physical characteristics relevant to the safeguard analysis I. The Gas Storage Facility: The storage project is located south of the Tuz Golu salt lake in south-central Turkey. The facility will be built in an underground salt formation that runs south of the Tuz Golu salt lake - the salt body has an average width of 2-2.5 km, is about 15 km long, and has an average salt thickness of 1,500 meters (exceeding 2,000 meters in several places). Geological screening has ranked Tuz Golu as thepreferred location for storing large volumes of gas. The caverns will be 'solution mined' using fresh water drawn from the Hirfanli reservoir through a 130 km pipeline. The fresh water demand is about 10-12 million cubic meters per year for six years. DSI (the State Water Board) has agreed to allocate this water which represents less than 0.5% of water inflow to the reservoir. The proposed salt caverns are about 20 km from a main gas trunk line near Aksaray making connection to the network easy. The brine from the solution mining will be discharged into an area of the Tuz Golu salt lake where there are no plant or animal life of any special interest. The brine will also help preserve the lake which is evaporating. II. The compressor stations will be located in Corum and Erzincan respectively next to the existing main gas pipelines. The site for these compressor stations is estimated to be about 30x40 meters. 5. Environmental and Social Safeguards Specialists Mr Norval Stanley Peabody (ECSSD) Mr Bernard Baratz (ECSIE) Mr Alessandro Palmieri (ESDQC) Page 3 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Cultural Property (OPN 11.03) X Indigenous Peoples (OD 4.20) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: Social safeguards - The project will involve land acquisition (less than 2 ha) and the acquisition of permanent easement (approximately 210 ha over 136 km) for the pipelines and some land acquisition for the storage facility and the two compressor stations, which will be determined during final design of the facilities. The pipelines and storage facilities are located in land that is used primarily for extensive grain cropping or is unproductive due to soil salinity. The easements will restrict actions on the surface that may damage the pipelines, but the impact will be insignificant. Similarly, land acquisition for the pump stations and the storage facility will have insignificant effect on cropping or economic use of the land. Dam Safety - The project will use water from the Hirfanli Dam to solution mine the underground caverns. The dam is operated by EUAS. Even though the project will use less than 0.1% of the reservoir capacity, since the project, during construction, will depend on the Hrifanli dam, the Bank's operational policy (OP 4.37) on Safety of Dams is triggered. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: No significant long-term impacts are anticipated as the result of land acquisition and acquisition of permanent easements as they will be located on land that is extensively farmed or unproductive. No indirect or long term negative environmental impacts are anticipated from the leaching and brine discharge activities. The area which will receive the brine discharge (Tuz Golu) is currently saturated with brine of the same quality as the discharge and this area is devoid of any significant terrestrial or aquatic flora and fauna. Page 4 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The project would initially have used ground water for solution mining purposes. During EIA consultations however, the local population expressed concerns with this approach, given the scarcity of water in the region. The project design was thereafter changed to utilize water from the Hirfanli dam. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Land acquisition - BOTA