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Turkey looks for Exxon LNG deal to replace Russia

Turkey LNG Exxonmobil Alamy/Piero Cruciatt
Turkey wants to sign a ten-year supply agreement with ExxonMobil for LNG
  • Ankara wants to buy 2.5m tonnes a year
  • Currently 40% of LNG comes from Russia
  • Turkey wants ‘new supply portfolio’

Turkey is aiming to secure a multibillion-dollar long-term liquefied natural gas deal with ExxonMobil as it strives to reduce reliance on Russian energy.

The Turkish energy minister, Alparslan Bayraktar, told the Financial Times Ankara wanted to buy up to 2.5 million tonnes of liquefied natural gas a year in a 10-year agreement. 

Bayraktar said the commercial terms were still being negotiated.

The imported LNG would cost about $1 billion, according to the data agency Argus. It is the equivalent of 7 percent of Turkey’s natural gas consumption last year.

Russia has been one of Turkey’s most important trade partners, and its largest hydrocarbon supplier. Turkey imports almost all its hydrocarbons, and more than 40 percent of Turkey’s gas supplies last year came from Russia. 

Mutual trade reached more than $26 billion in 2019, with Turkey’s exports nearing $4 billion and imports exceeding $22 billion. Energy was a significant element in that trade.

Moscow will also own and operate Turkey’s first nuclear power plant, under construction on the Mediterranean coast.

Ankara is looking to build a “new supply portfolio,” Bayraktar said. Turkey has expanded its LNG import infrastructure, so that around 30 percent of its natural gas imports are now LNG, up from 15 percent in 2014. Additionally, it has long-term LNG deals with Oman and Algeria.

Last year Ankara imported 5 million tonnes of LNG from the US.

Turkey has launched exploration and production operations, including a gas site in the Black Sea and oil drilling in the southeast of the country. Bayraktar said the country may later start oil exploration in the Black Sea as well.

ExxonMobil is one of several US producers in talks with Turkey for an LNG deal. Turkey’s main gas import long-term agreements with Russia and Iran are due to expire in 2025 and 2026. 

The US company wants to increase its LNG sales to 40 million tonnes a year by 2030.

It owns a 30 percent stake in the Golden Pass LNG terminal on the US Gulf coast, under construction in partnership with QatarEnergy and expected to start producing up to 18 million tonnes a year in 2025.

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