Allied International Plans to Invest $2 Billion in Turkey, Economy Minister Says

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkish Economy Minister Zafer Caglayan said that Energy Allied International (Houston, Texas) company has plans to invest in Turkey. "The company plans to invest around $2 billion in Turkey," Caglayan said after a meeting with the company's executives in Ankara.

As state-owned Anatolian News Agency reported, Minister Caglayan held talks with Energy Allied International's CEO Mike Nassar, Wolverine Power Group Limited's (Zeeland, Michigan) CEO Dennis Werner, Wolverine Power Group Limited's President Tom Hogan in Ankara. "Turkey spends around $700 million in importing two products that Energy Allied International plans to produce in Turkey," Caglayan said. "Their investment would be a crucial one in preventing current account deficit. Energy Allied International has an important project to produce chemical substances from coal."

The company plans to build a gasification plant in Turkey's Aegean province of Manisa, Soma, which has vast lignite reserves. Manisa's Soma district, with 800 million tons of lignite reserves, is one of the largest lignite deposits in the world.

"Our company is in talks with the local counterparts to create ventures. Our plans are the in very early stage right now," said Nassar. "If we can utilize the local resources, Turkey can gain an advantage in the energy sector. Turkey offers everything an investor looks for."

Lignite and low-rank coals are abundant in many regions of the world. They are also typically the lowest-cost coals to mine. In Turkey, this high-moisture and high-ash coal can cost up to five to six times less on a thermal basis than more widely used low-ash coal. Higher-rank coals must be imported. The savings could be directly translated into compelling economics for coal-based energy and chemical projects, such as those being considered in Turkey.

Turkey relies heavily on foreign sources of oil and imports. The country imports nearly 90% of oil; domestic supplies account for the remaining 10%.

Turkey's gross domestic product (GDP) expanded 3.2% in the first quarter of 2012, and the current account deficit, decreased to $67 billion, or about 8.6% of GDP. Central Bank of Turkey has been fighting to narrow the current account deficit, which ballooned in October 2012 to a record $78.3 billion.

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