Exclusive: Limak Energy CEO Eyes Balkans for Growth

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Researched by Industrial Info Resources (Sugar Land, Texas)--Limak Energy (Ankara,Turkey) plans to invest more in the Balkans region and is after new licenses, following its winning joint bid for electric distribution in Kosovo and the establishment of a new company for the European market in Bulgaria, Chief Executive Officer Birol Erguven said in an exclusive interview with Industrial Info.

Erguven said Limak Energy will establish new companies in Balkan countries and seek energy trade licenses in retail and wholesale production and sales.

Limak Energy is an emerging group of companies, with investments in electricity generation, distribution, sales and trading. Owned by the Turkish conglomerate Limak Group, Limak Energy has energy investments in Turkey, Bulgaria, the Republic of Kosovo and eastern European countries. It is a partner with BEDAS, Uludag Energy, Akdeniz Energy and Camlibel Energy joint venture companies, with a total customer base of 9.5 million and a distribution of 45 billion kilowatt-hours (kWh). BEDAS services 4.1 million subscribers in the European side of Istanbul. For additional information, see December 18, 2012, article - Turkey's Biggest Grid BEDAS Attracts $1.96 Billion in Privatization Tender.

A consortium of Turkey's Calik Holding and Limak won the tender for Kosovo's state-run power distributor, KEDS, with a bid of $32.7 million in 2011.

The company operates Hamitabat, Turkey's largest natural gas combined-cycle power plant (CCPP), with a 1,200-megawatt (MW) capacity, and plans to establish a trade company to import and sell gas in Turkey. Limak Energy has more than 2,000 MW of capacity and is targeting some 5,000 MW in five years, from coal to renewables.

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Gas Prices to Decrease
Erguven said his company foresees a decrease, or at least stagnation, in natural gas prices in the near future. "If you consider the general trend in the last couple of years, we don't expect a hike, but rather, lower prices from its current levels," he said.

He said Limak's investment in natural gas power was an extension of that price projection. "We will begin trading with imports and wholesale, but as well aim to import through pipelines in the future and balance imported gas volume with the demand of our own plants."

Limak acquired the Hamitabat CCPP in May 2013 for US$105 million and uses its gas trade business to support its own energy production units. "You have to be in natural gas trade business if you have a capacity over 1,000 MW, and you should secure your gas supply," he added.

The company has bid for power transmission line tenders between Turkey, Bulgaria and Greece, and plans to extend it to Europe to form an integrated system.

Erguven said he believes there will be no new investments in natural gas combined-cycle power plants in Turkey in the near future, as profitability is falling. However, he added that CCPPs would assume an important role to balance energy deficits in the future.

"It is only CCPP that can adjust its output according to changing load, and the market needs their flexibility and output power," Erguven said.

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