Türkiye and Shell sign 10-year LNG supply deal
Energy Minister Alparslan Bayraktar at the Long Term LNG Agreement ceremony held in Ankara on 2 Sept. 2024. (via X)
Türkiye has signed a 10-year liquefied natural gas (LNG) supply agreement with Shell Plc, a significant move aimed at strengthening its position as a regional energy hub.
The agreement starting in 2027 includes an option to redirect shipments to Europe, aligning with Ankara’s broader strategy to enhance its role in the European energy market.
Details of LNG supply agreement
Under the agreement, Shell will supply Türkiye’s state-owned energy company BOTAS with approximately 4 billion cubic meters of LNG annually, starting in 2027. This volume represents about 8% of Türkiye’s total gas demand in 2023, according to data from the national energy regulator.
Speaking at the signing ceremony in Ankara, Energy and Natural Resources Minister Alparslan Bayraktar highlighted the strategic significance of the deal. “The agreement includes an option for the gas to be delivered to European terminals outside Türkiye,” Bayraktar stated, noting that this flexibility provides BOTAS with “critical capabilities” in LNG shipping.
In his social media post on X, Alparslan Bayraktar stated, “Today, we signed an LNG agreement between BOTAS and Shell that will last for 10 years starting from 2027. Under the agreement, approximately 4 billion cubic meters of LNG cargo will be delivered annually, totaling 40 billion cubic meters.”
“Beyond the purchase and sale transaction, it is also important in terms of offering additional regional and global trade opportunities with options such as receiving from the filling port and unloading at European terminals,” Bayraktar added.
Strategic importance for Türkiye’s energy sector
The LNG deal is a key component of Türkiye’s ongoing efforts to become a major gas hub and supplier to the European Union.
Türkiye has been investing heavily in expanding its LNG import capacity and boosting domestic production, particularly in the Black Sea. Although Türkiye currently exports small volumes of gas to the EU, these flows are limited by pipeline capacity at its western border with Bulgaria.
Türkiye’s existing gas import relationships
Türkiye’s gas imports are primarily sourced through pipelines from Russia, Azerbaijan, and Iran, with LNG imports mainly from Algeria and the United States.
In May, BOTAS secured a separate 10-year LNG supply deal with U.S. energy giant Exxon Mobil Corp, covering up to 2.5 million tons per year. The agreement with Shell is expected to further strengthen Türkiye’s position in the global LNG market.
Turkish President Erdogan receives Shell CEO
President Recep Tayyip Erdogan and Shell CEO Wael Sawan held a closed-door meeting after BOTAS and Shell signed a 10-year LNG deal.
