Oil & Gas

Turkey is in discussions with U.S. supermajor ExxonMobil regarding a long-term LNG supply agreement, aiming to lessen its dependence on Russia or any single supplier, Turkish Energy Minister Alparslan Bayraktar revealed in an interview with the Financial Times. The potential deal with Exxon could involve acquiring 2.5 million tons of LNG annually for ten years, estimated to cost about $1.1 billion per year based on a pricing assessment by Argus.

While Turkey looks to develop its recent large natural gas discoveries in the Black Sea, it currently relies on imports for nearly all its natural gas consumption. Minister Bayraktar emphasized that Turkey, a NATO member with strong energy and trade ties with Russia, aims to establish a "new supply portfolio" for its gas needs, without excluding any potential supplier. Turkey currently has gas supply agreements with Russia, Iran, Oman, and Algeria.

Russia is Turkey's largest natural gas supplier, meeting approximately 40% of the country's demand in 2023. While Turkey has imported LNG from the United States in recent months, these volumes were obtained from the spot LNG market. Turkey now seeks to diversify its gas suppliers through additional long-term LNG agreements, adding to its existing long-term deals with Algeria and Oman.

The discussions with Exxon occur amid improved U.S.-Turkey relations following Ankara's decision earlier this year to lift its veto on Sweden's NATO membership. Turkey, greatly impacted by the recent energy price surge, aims to diversify its gas supply and considers gas prices a crucial factor in its decision-making process.

Minister Bayraktar emphasized the importance of securing gas supply, noting that it could come from various sources including Russia, Azerbaijan, Iran, or LNG options.