ISTANBUL(RAHNUMA): Turkiye has extended its expiring Russian gas import contracts by a year as it plans US infrastructure investment as part of efforts to reduce reliance on Russian energy, the Turkish energy minister said.
Turkiye is Russia’s last major natural gas market in Europe after years of war-related Western sanctions on Moscow.
It imports a total of 22 billion cubic meters of gas under the Gazprom contracts that expire at the end of the year, amounting to less than 40 percent of Turkiye’s overall gas mix, down from more than 50 percent in 2018.
The Russian gas is supplied via the Blue Stream and TurkStream pipelines under multi-year contracts starting from February 2003 and January 2020 respectively.
Turkish state gas importer BOTAS has separately signed a series of long-term contracts for liquefied natural gas (LNG), much of which is from the United States, taking advantage of large global LNG supply over the next few years.
BOTAS will continue to be supplied by Gazprom next year, but with a more short-term focus of one year, Energy Minister Alparslan Bayraktar said in embargoed comments to reporters in Istanbul on Wednesday.
Gazprom did not reply immediately to a request for comment.
INVESTMENT IN US GAS PRODUCTION
The minister said Turkiye also plans to invest in US gas production facilities to hedge against potential price increases on the 1,500 LNG cargoes it has agreed to buy from the US over the next 15 years.
“To hedge our position and create the whole value chain, we are considering investing in the upstream US market,” Bayraktar said. State company TPAO was in talks with US energy majors including Chevron and Exxon and a deal could be concluded next month, he added.
The US became Turkiye’s fourth-largest gas supplier this year at 5.5 bcm.
Most of the US LNG deals came shortly before President Tayyip Erdogan’s September visit to the White House, where US President Donald Trump asked him to stop buying oil from Russia, Turkiye’s largest supplier since 2022.
Russia supplied about half of Turkiye’s crude imports from January to September this year, but Turkish refiners cut imports sharply in November, Kpler data shows.
Private companies handle Turkiye’s oil and oil product imports, but Bayraktar said they are likely to comply with reductions, having done so in 2016-2017 in compliance with sanctions on Iran.
“It will be their call,” he said, adding that the government would step in if supply security was threatened.
IRANIAN GAS TALKS AND TURKMEN SUPPLIES
Turkiye is also in negotiations with Iran over a 10 bcm gas import contract that expires next July, aiming to ramp up gas supplies from Turkmenistan, Bayraktar said.
Turkiye signed a one-year 1.3 bcm gas deal with Turkmenistan this year, sourcing the gas via Iran.
Separately, Turkiye plans to add two more floating storage and regasification units (FSRUs) over the next few years to increase its LNG intake capacity, with the potential to charter them later to Morocco and other countries, the minister said.
Turkiye currently has three FSRUs and two on-shore LNG gasification terminals, with combined capacity of 50 bcm. In expectation of significant increases in its electricity consumption, Turkiye also plans to build two more nuclear plants and is in talks with South Korea’s KEPCO and Canada’s AtkinsRealis over deals to build them.
US-based Westinghouse has expressed interest in being involved in the second plant with KEPCO, Bayraktar said.
