Oil & Gas

Turkey has signed a 10-year liquefied natural gas (LNG) import agreement, extending until 2037, as announced by Energy Minister Alp Arslan Bayraktar on Monday, September 2, 2024.

Bayraktar highlighted that the deal presents an opportunity for Turkey to offload shipments at European import terminals, as reported by the Washington-based Specialized Energy Platform.

In response to the disruptions caused by the 2022 Russian invasion of Ukraine, and the subsequent halting of gas flows from Russia due to sanctions, Turkey has expressed ambitions to become a global gas export hub, particularly for Europe. During the first half of this year, Turkey emerged as the largest importer of Algerian liquefied gas.

The agreement signed between Turkey's Oil and Gas Pipeline Company (BOTASH) and Shell International will see Turkey importing about 4 billion cubic meters of LNG annually, equivalent to approximately 3 million metric tons.

Starting in 2027, Shell will supply a total of 40 billion cubic meters over the 10-year contract, with BOTASH using the gas for domestic consumption and regional trade, aligning with Turkey's goal of becoming an energy hub.

Turkey’s broader energy strategy includes plans to increase domestic production, as it ranks as the fourth-largest natural gas market in Europe. Efforts also involve significant LNG imports, such as the 2.17 million tons of Algerian gas brought in during the first half of this year.

To support these goals, BOTASH has leased a floating storage and regasification unit, Vasant 1, from an Indian company to bolster the Saros Gulf LNG terminal, and Turkey expects further increases in domestic production from the Sakarya offshore gas field in the Black Sea.